Veitch Penny LLP - Exeter | Crediton, Devon

Case

SRG v Shell UK Limited : Court of Appeal : 24/10/02

Issues

(1) Unfair Dismissal
(2) Service Station Operators - Self-employed Franchisees
(3) Costs Orders and Costs Warnings
(4) Pressure to withdraw case

Facts

This was an Appeal by Shell against the finding of the Employment Appeal Tribunal which held that the Applicant had been driven to withdraw her Unfair Dismissal complaint against Shell because of unfair pressure placed on her by the Employment Tribunal.

In 1993, the Applicant and her husband had begun to operate a service station under which Shell termed a "Franchise Agreement". There were a number of subsequent agreements two of which were with her husband alone. The final Agreement dated 1st August 1998 was between the Applicant and Shell which Shell terminated in March 1999 prior to a number of statutory changes coming into effect in the following months which would have been of benefit to workers such as the Applicant.

The Applicant subsequently filed an Application claiming unfair dismissal on the basis that she had been employed since 1993 as Manageress of the Station.

The issues before the Employment Tribunal were:

(i) was the relationship between Shell and the Applicant one of employer and employee; and
(ii) if so, did the Applicant have sufficient service to qualify for protection against unfair dismissal.

The Chairman of the ET indicated at the outset of the hearing that it was open to the Applicant to proceed, but that she risked a substantial Costs Order if she went on with the issue of two year's continuous service and was unsuccessful.

Accordingly the Applicant withdrew her application which the Employment Tribunal informally dismissed. The Employment Appeal Tribunal held that the Employment Tribunal was wrong to issue Costs Warnings in the manner it had and its approach was unfair and oppressive and had left the Applicant with no alternative but to withdraw her claim.

Decision

It was held that the Tribunal had to be careful not to place unfair pressure on the litigant in person and should only give a Costs Warning where there was a real risk that an Order for costs would be made against the unsuccessful Claimant at the end of the hearing. In this case the risk of a Costs Order being made against her was not sufficiently high to justify the pressure that was placed on her, and it followed that the Applicant had been denied a fair hearing.

Comments

This case goes to show the moves that are now being made in the Industrial Tribunal to use Costs Orders as a mode of bringing claims without any merit to an end, but the risk of a Costs Order still has to be fairly high if it is to be used by Tribunals in these situations. It is almost inevitable that Costs Orders will be on the increase to deal with the inundation of meritless claims.