M Dowding v The Character Group PLC

The Employment Appeal Tribunal dismissed the appellant's challenge to the tribunal's findings on liability: the tribunal was entitled to find that the claimant did not hold a subjective belief that his disclosures were made in the public interest (and in the alternative that any such belief was not reasonable), that the alleged disclosures did not cause his dismissal, and that dismissal for a breakdown in trust and confidence was within the range of reasonable responses (applying the Burchell approach to conduct-based dismissals under section 98 of the Employment Rights Act 1996).

On costs, the EAT held that a tribunal has power under the Employment Tribunal Rules of Procedure 2013 to direct that a detailed assessment be on the indemnity basis, but that here the tribunal had not explained why the higher threshold for indemnity assessment (as identified in Howman) was met. The EAT also allowed the appeal in respect of the separate "costs of costs" award because the tribunal had not sufficiently explained why the maximum summary amount of £20,000 was warranted by the nature, gravity and effect of the claimant's conduct.

Background and parties: The claimant was the respondent company's finance director from 2012 until his dismissal in September 2017. After dismissal he brought tribunal claims alleging detrimental treatment and unfair dismissal arising from protected disclosures (relying on sections 47B, 48 and 103A Employment Rights Act 1996) and, in the alternative, ordinary unfair dismissal (sections 94 and 98 ERA 1996). The respondent defended the claims and also sought an award of costs. The ET heard the merits (reserved decision September 2020) and a subsequent costs hearing (reserved decision November 2021).

Procedural posture: The tribunal dismissed the substantive claims and awarded the respondent costs capped at 21% of its claimed costs (£127,563.70) to be assessed on the indemnity basis, and awarded £20,000 as the respondent's costs of the costs hearing. The claimant appealed both the liability and costs decisions. This EAT hearing was held in July 2024 and the judgment was handed down on 24 September 2024.

Nature of relief sought: The claimant sought declarations and remedies for detriments and unfair dismissal allegedly linked to protected disclosures, and in the alternative ordinary unfair dismissal remedies. The respondent sought a costs award for the unreasonable conduct of the claimant and for the costs hearing itself.

Issues framed:

• whether the claimant made qualifying protected disclosures and, if so, whether he believed they were made in the public interest and whether that belief was reasonable;
• whether dismissal was for the reason or principal reason of protected disclosures or for ordinary conduct-based reasons;
• whether the employment tribunal lawfully and reasonably found dismissal fair under section 98(4) applying the Burchell approach;
• whether the tribunal was empowered to direct that a detailed costs assessment be on the indemnity basis under the 2013 Rules and, if so, whether it had adequately applied the higher threshold for indemnity assessment; and
• whether the tribunal sufficiently justified the summary award of £20,000 for the costs hearing.

Court's reasoning and subsidiary findings: The tribunal made detailed factual findings adverse to the claimant on credibility and honesty, including that he had given dishonest evidence and made serious unproven allegations against others. The tribunal concluded the claimant's communications about section 228 Companies Act 2006 were viewed by him as a private/technical complaint rather than a public-interest disclosure and that his whistleblowing allegations were first pleaded only on appeal. The tribunal also found a genuine belief by the employer in loss of trust and confidence arising from persistent insubordination, failure to provide requested documents in the requested form and the August meeting incident, and that the appeal process was independent and thorough.

The EAT rejected the liability appeal, finding the tribunal applied the correct legal tests (including recognition of the band of reasonable responses and Burchell principles) and gave adequate reasons. On costs the EAT concluded the tribunal did have power under the 2013 Rules to direct a county court detailed assessment on the indemnity basis, but quashed the specific direction because the tribunal had not shown it had applied the higher Howman threshold or explained why indemnity assessment was warranted. The EAT also quashed the £20,000 costs-of-costs sum because the tribunal had not adequately explained why the maximum summary award was justified by the nature, gravity and effect of the claimant's conduct. The EAT remitted those limited issues back to the same tribunal panel for fresh determination.

The appeal against the liability decision is dismissed: the tribunal validly concluded the claimant did not have the requisite public-interest belief and that dismissal for a breakdown in trust and confidence was within the band of reasonable responses. The appeal against the costs decision is allowed in part: the EAT held the tribunal does have power under the Employment Tribunal Rules of Procedure 2013 to direct detailed assessment on the indemnity basis but quashed the tribunal's specific direction because it had not demonstrated or explained why the higher threshold (Howman) for indemnity assessment was satisfied; the EAT also quashed the £20,000 costs-of-costs award because the tribunal had not sufficiently explained why that maximum summary figure was justified by the nature, gravity and effect of the claimant's conduct. The tribunal is to reconsider those two limited matters and explain its reasoning afresh.

Employment Tribunal (Merits decision reserved September 2020 at London South; costs decision reserved November 2021) – appeal to the Employment Appeal Tribunal heard July 2024; judgment delivered 24 September 2024, Neutral Citation [2024] EAT 153.