This case appears to have rather passed without comment in the media and the UK employment “blogosphere” but a recent Employment Tribunal case involving an ex-Managing Director, a multinational claim and an expenses scandal is interesting for a number of reasons, which I’ll address in this post.
The Employment Tribunal claim was submitted by an un-named ex-Managing Director of a large company – all the parties in the case were un-named for legal reasons – after he was fired in 2012 for racking up hundreds of thousands of pounds on illegitimate expenses on the company credit card. The ex-employee then appears to have attempted to negotiate a multi-million pound settlement (which failed) and then sued his ex-employer for unfair dismissal, victimization and sexual harassment.
The Employment Tribunal appears to have given the Claimant’s case quite short shrift, describing it in its judgment as apparently a “claim which should never have been brought”. They were highly critical of the Claimant and found that the Claimant’s evidence was, in parts, lacking credibility (particularly in relation to his relationship with his boss). The Tribunal therefore found that the Claimant’s claims of unfair dismissal, victimization and sexual harassment were not well-founded.
The reasons why this case is interesting are three-fold, in my opinion:
- The possibility of a counter-claim by the Respondent
- The potential for the costs of the case to be recouped by the Respondent
- The potential for a Respondent to protect itself from adverse publicity by applying for a restricted reporting order, apparently used in this case
As detailed by Julian Allsopp in the (much-recommended) ELA Briefing this month, the potential for counter-claims in Employment Tribunal cases appears to be much-underrated by employment law practitioners. If a Claimant submits a claim for breach of contract (although it’s not known whether the Claimant did in this case) then an employer can bring a counter-claim against the Claimant for breach of contract themselves. This serves a number of purposes – it provides a potential tactical advantage to the Respondent, may substantially offset the value of any compensation the Claimant is awarded, and provides a route for an employer to obtain a form of redress if they have suffered financial loss because of the unreasonable and/or negligent actions of their former employee.
It’s safe to say that if the Employment Tribunal labels a claim one that “should never have been brought” then the Respondent will probably smell blood in the water and may seek to pursue the Claimant for the whole or a part of their costs of defending the claim. This can not only provide the employer with some form of financial relief but it may also serve as a useful bargaining chip through the running of the case – if the Claimant is repeatedly warned that they could face a heavy costs bill at the end of the proceedings it may lead them to try and settle, or even pressure them to withdraw, the case before it comes to the final hearing.
Something that Claimants often say to me at the outset of their case is “my employer will want to settle this because they won’t want the publicity”. Although publicity can sometimes prove advantageous to the running of a claim, it is not something that should be considered as something that will factor particularly heavily in most employers’ minds as a reason to settle a claim. First off, there’s no guarantee that the case will receive any publicity in the first place; secondly, there’s no guarantee that the employer will particularly care that the case may receive publicity; and, thirdly, the Respondent can seek legal protection against publicity of the case – either through an application for a Restricted Reporting Order in the Employment Tribunal or for an injunction in the civil courts, either of which (if granted) will stop public reporting of relevant parts of the proceedings.