Regardless of how hopeless a Tribunal claim may be, many employers feel they are placed in an impossible lose-lose situation; because even if they successfully defend the claim, Employment Tribunals rarely make awards of costs against the employee who brought it and employers still end up out of pocket.
In the recent case of Nicolson Highlandwear Ltd v Nicolson 2010 EAT, the employee had been dismissed due to fraudulent business practice in the running of the shop he managed. Having been dismissed for gross misconduct he brought an unfair dismissal claim. The Tribunal found that although the dismissal had been procedurally unfair, the claimant’s gross misconduct had directly led to his dismissal (and so he would have been dismissed anyway).
The EAT considered whether costs should be awarded against the fraudulent employee. They held that a Claimant who lied in the tribunal and who defrauded his employer should have to pay the Respondent's costs.
Especially when the employee has been dismissed for dishonesty, the Respondent defending a claim should consider issuing a ‘costs warning’ against the claimant, saying that an application for costs would be brought if the claimant loses. However, employers should not get too excited about the prospect of recovering costs from an employee who brings a claim but is found to have lied in the course of those proceedings. Tribunals are often reluctant to make findings of dishonesty by a Claimant, costs awards remain rare and seldom cover all costs of defending a claim. Furthermore, even if an employer gets an award of costs, actually enforcing the judgement may still prove difficult, especially if the Claimant remains unemployed.
jrc@reculversolicitors.co.uk
www.reculversolicitors.co.uk
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