Hotel group has secured a costs award of £432,000 at an employment tribunal.
After multiple claims brought by an employee were dismissed, the Employment Tribunal has awarded £432,000 to an employer, which is believed to be the largest costs award to date.
The Respondent, Millennium & Copthorne Hotels, is a global hotel group and, with its affiliated companies, employs around 10,500 employees worldwide. The former employee (Mr Tan), a senior vice-president for procurement, had brought claims in the Employment Tribunal ('ET') in 2017, after he left the hotel group following a redundancy process.
Mr Tan described himself as Chinese Singaporean by ethnicity and gay by sexual orientation. The list of claims pursued included unfair dismissal, age discrimination, race discrimination, sex discrimination, victimisation, harassment, whistleblowing detriment and unfair deduction from wages. Mr Tan submitted more than 3,000 pages of documents before the ET, including covert recordings of staff. All claims were unsuccessful and dismissed.
Mr C H Tan v Copthorne Hotels Ltd: Decision
The ET has awarded Millennium & Copthorne Hotels £432,000 – including £111,000 for the expenses of the costs proceedings themselves, on the indemnity basis – believed to be one of the largest awards ever made in the jurisdiction. The Respondent was awarded this level of costs as a result of the entirely 'vexatious' nature of Mr Tan's claims, which the ET held he pursued unreasonably.
The ET commented on Mr Tan's scattergun tactic of making numerous claims, lodging every complaint which came to mind, in an attempt to strengthen his position. With regard to the unfair dismissal claim, it was found that the Respondent had followed a fair redundancy procedure. In any event, it was noted by the ET that, had it not found the dismissal to be fair, it would have found that Mr Tan would have been dismissed in any event, as soon as the Respondent found out about the making of his covert recordings. This was deemed 'duplicitous' and undermining of the relationship of trust and confidence between the parties.
Costs regime in the ET
Unlike civil courts, costs do not "follow the event" in the ET. If a party is successful in bringing or defending a claim before the ET, they will not necessarily benefit from an order that the unsuccessful party pays their costs. However, Tribunals do have the discretion to make costs orders in certain circumstances.
Notwithstanding the above, orders for costs in ETs remain the exception, rather than the rule, and therefore in the vast majority of tribunal cases, they are not made. This does not mean that the facts of a case have to be exceptional for a costs order to be made, but that the relevant test needs to have been satisfied.
An ET may make a costs order, and must consider whether to do so, where it finds that:
1. A party, or their representative, has acted vexatiously, abusively, disruptively, or otherwise unreasonably in the bringing or conducting of the proceedings, or a part of them; or
2. Any claim made in the proceedings by a party had no reasonable prospect of success.
An ET may also make a costs order where either of the following applies:
1. A party has been in breach of any order or practice direction; or
2. A hearing has been postponed or adjourned on the application of a party.
Where the case falls into a category in which costs may be awarded, case law has emphasised that the ET has a wide and unfettered discretion. An ET may have regard to a party's ability to pay when considering whether to make a costs order and, if an order is made, the amount. On the rare occasion that costs awards are granted, the average award made is only around £2,400.
The size of the award in this case follows the finding that Mr Tan had been "duplicitous" and had undermined the trust and confidence between himself and his employer. The award also reflected the lengths that Mr Tan went to wrongly implicate his colleagues.
What this means for employers
The case does not establish new principles but does contain some succinct reminders of existing ones. It also illustrates that the rules on costs can operate harshly against parties. This decision has been seen by some as an appropriate message being delivered by the ET to those who bring, or who consider bringing, disingenuous claims. Indeed, it can certainly serve as a warning to employees bringing unfounded claims. This may be even more relevant in the coming months, as employers look to face an increase in the number of ET claims as the furlough scheme comes to an end.