Case No: A2/2008/2155
Neutral Citation Number: [2008] EWCA Civ 1554
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(MR JUSTICE NELSON, MS V BRANNEY 
& MR BM WARMAN)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday, 16th December 2008

Before:

LADY JUSTICE SMITH DBE
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Between:

	AFOLAYAN
	Appellant	
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MRCS LTD & ANR	
Respondent	

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(DAR Transcript of 
WordWave International Limited
A Merrill Communications Company
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THE APPELLANT APPEARED IN PERSON
THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED

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Judgment
Lady Justice Smith:

1.	This is a renewed application for permission to appeal the order of Nelson J made in the EAT on 18 July 2008.  He refused Mr Afolayan’s application for an order for costs following on from the successful conclusion in the EAT on 4 June 2008 of his claim for compensation for unfair dismissal. 
 
2.	Costs in the EAT are awarded under rule 34(1)(a) of the EAT rules, which provides:
“Where it appears to the Appeal Tribunal that any proceedings brought by the paying party were unnecessary, improper, vexatious or misconceived or that there has been unreasonable delay or other unreasonable conduct in the bringing or conducting of proceedings by the paying party, the Appeal Tribunal may make a costs order against the paying party.”

3.	Nelson J held that the respondent employer had not behaved in any way so as to justify making a costs order against it.  Having read the papers I have come to the conclusion that permission should be given.  Because it is unusual for permission to be granted in circumstances such as these and because the applicant is unrepresented, I propose to set out my reasons in some detail.

4.	 MRCS Limited, the respondent, runs residential care homes for disadvantaged young people.  The applicant was employed by it as a care worker.  MRCS operated a behaviour management policy for handling the residents, some of whom exhibited challenging behaviour.  Within that policy was a passage that instructed carers who considered that a resident’s behaviour was approaching criminality to warn the resident that the police would be summoned if he or she were to do anything illegal.  The policy was, the ET was later to find, in parts vague, unclear and inconsistent.  

5.	Over a period of time the relationship between the applicant and his managers deteriorated.  He made a number of complaints, in particular about staffing levels and the conduct of two of the three managers of the home.  In October 2005, at a meeting held to discuss the applicant’s complaint about an incident that had occurred in April of that year, the managing director said of the applicant: “I would rather see you go”.  The applicant construed that as the expression of a wish that the applicant’s employment should cease.  

6.	In November 2005 an incident occurred in which the applicant was assaulted by a resident named C and suffered an injury to his face.  The police were called and C, who had run away, was arrested.  The applicant was off work for three weeks.  The unit manager’s report of the incident described what had happened and was uncritical of the applicant’s handling of the incident.  An eyewitness to the incident, Mr Oke, gave a statement to the employer.  He too was uncritical of the applicant and blamed the entire incident on C.

7.	However, about two weeks after the incident, C made a complaint against the applicant, alleging that he was responsible for starting the incident and alleging that he had touched C inappropriately.  No particulars of this inappropriate touching allegation were given.  C also accepted that he had overreacted and had assaulted the applicant.  The respondent decided to bring disciplinary proceedings against the applicant.  A second statement was taken from Mr Oke but not disclosed to the applicant.  That statement repeated the earlier account and added that C had never complained to him about the applicant’s conduct, despite having plenty of opportunity to do so.  All that C had ever said to Mr Oke since the incident was that he was sorry for what he had done.  This statement also explained that when he -- Mr Oke -- arrived on the scene of the incident, the applicant was then able to extricate himself from C who, until then, had been holding the applicant firmly in his grasp.  Mr Oke had then advised the applicant to call the police and at that stage C had run off.

8.	  On 18 January 2006 C was convicted of assault.  On 23 January, at the first disciplinary hearing, a panel, chaired by a Ms Oxley, recommended that the applicant be dismissed.  Three reasons were set out, of which the third was later said to be crucial.  That was that the applicant had breached the behaviour management policy in that he had not issued a warning to C that the police might be called. It was said that he had “breached the bounds of safe child care practices” as set out in the company’s policies.  

9.	On 13 February 2006 there was an appeal to Mr Henry, the managing director -- the man who had earlier expressed the desire that the applicant should leave.  The applicant regarded this process as a sham, because he considered that Mr Henry had already made his mind up and wanted to be rid of him.  The result of the appeal was that Mr Henry held that the applicant was guilty of gross misconduct.  He had breached the behaviour management policy and, it was said, he had also responded to C’s provocation by assaulting him or by abusing him in some unspecified way.  Given that the applicant had received a final written warning a year earlier, dismissal was appropriate.  The ET held that the reason for dismissal was that the disciplinary panel had concluded that the applicant was guilty of gross misconduct.  That conclusion had been permissible on the evidence presented.  However, the ET also held that the dismissal had been procedurally unfair for two reasons.  First, Mr Oke’s second statement had not been disclosed to the applicant; and second, Mr Henry had prejudged the appeal.  However, the ET held that these had made no difference to the outcome.  They held that the applicant had contributed 100% to his dismissal by his misconduct.  He was not entitled to any compensation.

10.	The applicant appealed to the EAT.  His grounds were somewhat diffuse and he was not allowed to proceed with the appeal until they had been redrafted, following a preliminary hearing in February 2008.  In due course, at the hearing in June 2008, the EAT allowed his appeal on several grounds.  First, the EAT had failed to identify the misconduct for which the employer had dismissed the applicant.  After the first disciplinary hearing, Ms Oxley had said that it was a breach of the behaviour management policy.  Mr Henry had introduced a finding of assault upon, or abuse of, a child.  It was only in evidence to the ET that Ms Oxley had said that the assault was the reason for the dismissal rather than just the breach of policy.  The EAT considered that the ET could not properly have held the employer’s view to be tenable without being clear about what the employer had decided.  That was a fundamental flaw in the decision.  

11.	Second, the ET had failed to take into account the fact that C had been convicted of assault.  The ET had accepted that the employer’s view of the alleged misconduct was tenable without hearing from Mr Oke and without apparently considering the fact that C, having been convicted of assault, his evidence might have some doubt cast upon it.  In effect, the holding that the employer’s view was tenable, was perverse.  

12.	Third, the ET had been wrong to hold that the procedural defects had made no difference.  They might well have done.  

13.	Fourth, the employer had conceded that the ET had erred in finding a 100% contribution, but argued that the ET would have been entitled to say that the applicant was not entitled to any compensation in any event, taking into account what was just and equitable.  The EAT rejected that.  Accordingly, the EAT said that there must be a finding of unfair dismissal.  That was inevitable, but it remitted the question of contribution to a differently constituted tribunal to assess compensation to take account of any findings the ET might make as to contribution and what was just and equitable.  

14.	Pausing there, the applicant had scored a substantial victory.  He had established that he had been unfairly dismissed.  His underlying case was that the employer’s disciplinary proceedings against him had been a device to get rid of him.  That was not without foundation, even on the ET’s findings.  Mr Henry had prejudged the appeal because he already wanted to get rid of the applicant.  The applicant was also of the view that the institution of the disciplinary proceedings was a ruse.  The initial reports of the incident were uncritical of the applicant.  C’s complaint was made two weeks after the incident, yet Mr Oke, when asked whether C had complained to him about the applicant’s conduct, said that he had not done so, despite having plenty of opportunity.  That might suggest that C’s complaint was indeed fabricated.

15.	The ET essentially took the employer’s view of the facts, except for the finding of prejudice by Mr Henry.  The EAT’s job was to analyse the reasoning of the ET, and they found it wanting.  The EAT did not go on in its June decision to consider whether the employer had behaved improperly.  It did not need to do so.  That consideration arose only when the applicant made his application for costs.  As Mr Afolayan well understands, costs in Employment Tribunal cases are only awarded where the conditions satisfied in rule 34(1)(a) are satisfied.  Here Mr Afolayan seeks an order for the costs of the whole proceedings, including the hearings in the ET and the EAT, including a preliminary hearing before Cox J which took place in January 2008, as well as a preliminary hearing before Elias J, the President, in February 2008.  

16.	In rejecting this application for costs, Nelson J said this:
“We have considered the Appellant’s representations in detail but we are not satisfied that the actions or conduct of the Respondents can properly be described in any respect as unnecessary, improper, vexatious or misconceived or that they have been guilty of unreasonable delay or unreasonable conduct in bringing or conducting of the proceedings.  The Respondents were entitled to seek to uphold the favourable decision they had obtained before the Employment Tribunal, which had come to its conclusion after hearing the evidence.  To resist the Appellant’s appeal was neither unnecessary, improper, vexatious or misconceived or unreasonable.  Nor do we consider that the conduct of the appeal by the Respondent could in any way be described as unnecessary, improper, vexatious, misconceived or unreasonable.  Nor do we consider that any delay can be attributed to the Respondents in such a manner as would justify an order for costs.  Nor is there any proper basis for claiming costs in respect of the hearing before Mrs Justice Cox, the application for which was considerably out of time.”

17.	On reading that, it appears to me that it is arguable that Nelson J’s approach was wrong.  He has considered only the employer’s impropriety in defending the judgment in the EAT.  He has not considered whether the opposition to the claim in the ET was improper.  I would accept that the grounds of the application before the EAT which were drafted by the applicant were not as clear as they might have been.  They did include a lot of irrelevant and unsustainable allegations.  However, they also contained as his first point the allegation that I have summarised, namely that these disciplinary proceedings were brought in bad faith from the beginning.  Nelson J’s order and reasoning does not deal with that point.  It appears to me that it is arguable that if an employer brings disciplinary proceedings in bad faith and then contests the claim for unfair dismissal in bad faith, that could amount to improper conduct within rule 34(1)(a).
  
18.	It seems to me therefore that it is arguable that Nelson J has erred in not dealing with that contention.  It may be that it will not be possible to make a final decision on this issue because at present the necessary findings of fact have not been made.  They may have to await the findings of the second Employment Tribunal to which the remedies’ hearing has been remitted.  I expect that it will pronounce upon the applicant’s role in the events which gave rise to the proceedings. However, that will have to be a matter for the full court.  

19.	I grant permission to appeal on the above basis only.  Permission is refused in respect of all the remaining grounds.  The grounds must be amended to reflect only the ground on which I have given permission.  I urge the applicant to seek representation.  Because the Christmas vacation is approaching, I extend time for the amendment of the grounds until Friday 16 January 2009.

Order:  Application granted on a limited basis