Veitch Penny LLP - Exeter | Crediton, Devon

Case

Kopel v Safeway Stores Plc
Employment Appeal Tribunal - (11 April 2003)

Issues

(1) Employment Tribunal procedure
(2) Costs
(3) Unreasonable behaviour

Facts

Kopel was employed as an Assistant Controller on the Delicatessen counter. Following an incident between Kopel and another employee, Kopel complained informally to her employer that the Customer Services Manager had been abrupt with her and favoured another Assistant Controller. Thereafter she wrote to the Store Manager complaining that she had been subjected to public humiliation and harassment over a considerable period. The Manager decided that he would investigate the complaint fully after the Christmas holiday. During December Kopel’s colleagues complained to the Manager in respect of her behaviour. It was decided that Kopel should be put on to the checkout but Kopel refused and was suspended on full pay. An external Manager investigated the situation and found no evidence substantiating Kopel’s complaints. As a result of this she resigned.

Kopel entered a number of complaints at the Employment Tribunal. Her complaint included allegations that she had been discriminated against on the ground of her sex and that she had been constructively and unfairly dismissed. Furthermore she claimed that her employer had infringed Articles 3 and 4 of the European Convention on Human Rights namely the prohibitions against torture and slavery.

The Employment Tribunal dismissed Kopel’s claims and noted that some of her arguments were “frankly ludicrous”. The Tribunal had found no breach of contract by Safeway or that any conduct on its part was likely to destroy the trust and confidence between the parties. Kopel’s resignation did not amount to a constructive dismissal.

The Tribunal then considered whether to award any costs against Kopel. It found that she had not entered into any meaningful settlement negotiations either directly with Safeway or through ACAS. The Tribunal decided that Kopel’s Human Rights claims were seriously misconceived and that her documentary evidence did not support her case. It found that prior to the hearing, Safeway’s Solicitors sent Kopel a letter headed “Without Prejudice Save as to Costs” in which they offered Kopel the sum of £5,700.00 in full and final settlement of her claims. The Tribunal found that her refusal of this “Calderbank” offer amounted to unreasonable conduct of the proceedings. The “Calderbank” rule means there are cost consequences for a party who, after refusing an offer of settlement made without prejudice save as to costs, subsequently fails to obtain a higher award than the sum offered at the final hearing. The Tribunal therefore concluded that it would exercise its power to award costs against the former employee.

Kopel appealed the decision to award costs against her.

Decision

The Employment Appeal Tribunal dismissed Kopel’s appeal.

The Appeal Tribunal confirmed that the rule in Calderbank did not apply to proceedings before the Employment Tribunal. The principle was only relevant to matrimonial proceedings. Accordingly the Tribunal’s conclusion that Calderbank applied was undoubtedly mistaken.

However, the Appeal Tribunal confirmed that a Tribunal could take an offer of the Calderbank type into account when assessing costs under Rule 14 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001. It noted that a failure by an Applicant to beat a Calderbank offer did not by itself mean an Order for costs should be made. In the first instance, the Tribunal should find that the conduct of the Applicant in rejecting the offer was unreasonable. In this case Kopel had rejected a genuine offer from Safeway and had included in her complaint a manifestly misconceived claim under Articles 3 and 4 of the European Convention on Human Rights.

On the basis that the Tribunal had been correct to conclude that her rejection of the offer was unreasonable, it was found that the Tribunal had been within its power to award costs against her.

Comments

Successive changes to the Employment Tribunals Rules of Procedure have already resulted in more frequent awards of costs being made in respect of unreasonable claims. The Appeal Tribunal’s decision in this case is likely to increase this trend, and should be borne in mind when dealing with Tribunal proceedings.