Costs awarded against claimant although she succeeded with part of her claim
The EAT has upheld a tribunal order that the Claimant should pay the Respondents’ costs on the grounds she had behaved unreasonably in making a large number of unsubstantiated allegations of race discrimination, even though she succeeded with her claim for unfair dismissal.
The Claimant took a trip to India for five weeks, which her line manager maintained was unsanctioned. The Claimant asserted that approval had been given. This led together with other matters to a breakdown in the trust and confidence between the Claimant and her manager. Disciplinary proceedings were taken against the Claimant who was dismissed for ‘some other substantial reason’. The substantial reason was the breakdown in trust and confidence between the Claimant and her manager.
The Claimant brought a claim for race discrimination against both her line manager and her employer. She also commenced proceedings for unfair dismissal.
The employment tribunal accepted that there had been a breakdown in trust and confidence and that this was potentially a fair reason for dismissal for some other substantial reason. However, the employment tribunal considered that the dismissal was unfair because during the course of the dismissal proceedings the dismissing officer decided to make enquiries of previous managers of the Claimant who had highly critical views about the Claimant which he took into account when deciding to dismiss. However, he did not inform the Claimant that he had spoken to her previous managers so the Claimant was not in a position to challenge the allegations made against her.
The tribunal also ruled that it would not be just and equitable to make any award of compensation to the Claimant as the breakdown in the working relationship between the Claimant and her manager was entirely the fault of the Claimant.
However, the employment tribunal dismissed the discrimination claim and ordered the Claimant to pay the Respondents’ costs in defending that claim on the grounds that the Claimant’s pursuit of serious allegations, primarily against her line manager, all of which the tribunal roundly rejected, constituted wholly unreasonable conduct by her.
The EAT rejected the Claimant’s appeal against the costs order. The EAT stated that it is generally considered extremely unpleasant to have allegations of racial discrimination made against an employee and making such allegations is a serious matter. The EAT was unmoved by the Claimant’s submissions that she honestly believed in the complaints she had made and they were not made for any perverse motive; and that, in the absence of an express finding of dishonesty, the employment tribunal's finding that she had behaved unreasonably was perverse
This case builds on a suggestion by the EAT in an earlier case that where allegations made by a party are found to be wholly false, it might be perverse for a tribunal to fail to conclude that the making of such false allegations did not constitute a person acting unreasonably.
The risk of being penalised in costs should discourage claimants from making unsubstantiated allegations of discrimination.
The case is also useful as a reminder to employers that it will nearly always be unfair to base a decision to dismiss on evidence that is not disclosed to the employee. In this case, the investigating manager was influenced in his decision to dismiss the Claimant by the criticisms made of the Claimant by her previous managers but his failure to give her the opportunity to respond to the criticisms made the dismissal unfair.
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