Baillon v Gwent Police

An Employment Tribunal may draw an adverse inference about mitigation income where a claimant has failed to provide supporting financial information. Its resulting assessment must nevertheless be rational, adequately reasoned and directed to the loss actually claimed.

Under Employment Tribunal Rules, rule 76(1), even very serious pre-proceedings conduct does not itself justify costs. The applicant must show unreasonable conduct in bringing or conducting the proceedings, or another specified basis for costs.

A party which has agreed compensation without reservation cannot subsequently challenge that agreed figure by appeal.

The claimant had succeeded before the Cardiff Employment Tribunal in a claim of automatically unfair constructive dismissal under section 103A of the Employment Rights Act 1996. At remedy hearings, the Tribunal assessed loss of earnings after the claimant established a business, made findings relevant to pension loss, and refused his application for indemnity costs.

The claimant appealed the income-loss assessment and the costs refusal. The employer cross-appealed the finding concerning the likelihood that the claimant would have remained employed until age 60. The central issues were whether the earnings assessment was sustainable, whether an agreed pension figure could be challenged, and whether the employer's conduct justified costs under rule 76(1).

1. Appeal allowed in part. The Employment Appeal Tribunal set aside and remitted the findings governing loss of income. Although the Employment Tribunal was entitled to infer from deficient financial material that the claimant's income from his mitigation business exceeded that asserted, its ultimate figures were arbitrary, muddled and inadequately reasoned.

   The assessment did not satisfactorily account for the four-month establishment period, inevitable start-up costs supported by material before the Tribunal, or the distinction between the period claimed and projected figures extending to five years. A more rigorous assessment might have produced a different result.

2. Cross-appeal dismissed. The Employment Tribunal's apparent conclusion that there was no prospect of the claimant leaving before age 60 was not a conclusion open to it. There must have been some prospect of voluntary or involuntary departure during the relevant period. However, the parties had subsequently agreed the grossed-up pension-loss figure without reservation and the employer had paid it. The Tribunal had made no pension award capable of challenge. The employer should instead have sought reconsideration or appealed before agreeing the figure.

3. Costs appeal dismissed. Rule 76(1) of the Employment Tribunal Rules concerns unreasonable conduct in bringing or conducting proceedings, not merely the conduct which gave rise to the claim. However egregious the employer's conduct before proceedings, it could not alone found a costs award. The Tribunal was entitled to conclude that it had not been unreasonable to defend a factually contested claim involving several issues.

The loss-of-income issue was remitted to the same Employment Tribunal. No further evidence could be presented, but the parties could make submissions on the evidence already before it.

• Employment Appeal Tribunal: Allowed the claimant's appeal on loss of income and remitted it; dismissed the claimant's costs appeal and the employer's pension cross-appeal.
• Employment Tribunal sitting in Cardiff: Held that the claimant had been automatically unfairly constructively dismissed under section 103A of the Employment Rights Act 1996. Remedy judgments were sent out on 3 January 2014 and 11 February 2014.