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Opinion
David Woods, 06 Jun 2011
Global business outsourcing firm MSX International (MSXI) has recovered substantial costs following an employment tribunal claim.
The case involved four former employees who all claimed their dismissals on grounds of redundancy were unfair.
A variety of other claims were also made, including claims for age discrimination (all four employees were aged over 55). Following a 10-day tribunal hearing in january this year, MSXI won on all grounds, but this left the company with a six-figure legal bill.
The company's employment lawyer, East Anglia-based Prettys, advised MSXI to make a costs application against the four claimants, which resulted in a substantial negotiated settlement of £65,000.
Kelly Sayers (pictured), partner and head of employment services at Prettys, said: "Companies largely steer clear of making costs applications following a tribunal hearing. However, there are situations where this course of action is appropriate and this was one of them. In light of the proposed reforms to the employment tribunal process, it is likely that tribunal judges will be placing more focus on making costs awards in the future.
"It is our view that a well-prepared case and an aggressive and well-argued costs application were key to MSXI successfully obtaining such a high settlement. Genuine engagement with the claimants regarding settlement and detailed narratives of all the work done (so that the costs the client had incurred were transparent to the claimants) also contributed to the positive outcome of this case. In addition, MSXI had a decisive victory at the full merits hearing as a result of good witnesses who had spent time on their preparation."
2 comments on this article |
Bay Jordan 06 Jun 2011
I would love to know more of the details of this case and why the damages were awarded. Negotiated damages of £65,000 mean that the 4 people concerned paid an average of £16,250 each - a significant sum in anyone's book. Which begs a number of questions. 1. How much redundancy pay did they receive in the first place? 2. What economic justification does an employer have for paying out such huge sums of money to people to effectively do nothing at a time when (presumably) costs are already under strain? Could they not have made more productive use of these people? 3. What was the value of these people to the organisation? If it was so little as to justify such alarge payout why had they been there so long in the first place? 4. As all the people involved were over 55 they are all presumably approaching retirement age, in which case their redundancy pay would have provided a useful bridge for their respective futures. These costs would have severely damaged that. What kind of message does that send out to other employees about the way the company treats its employees? Could the situation not have been avoided? Of course one cannot pass judgment without knowing all the facts, but I cannot help wondering to what extent these issues could/should have been avoided.
Bill Grounds 09 Jun 2011
I have been involved in a number of businesses over the years and have to deal with numerous unfair dismissal/redundancy claims. In all cases the actions were taken by disgruntled ex-employees that felt they could get more from their previous employers by taking them to an employment tribunal, most encouraged by the advice of their solicitors. I am pleased to say not once have the employers lost a case, as they have always been careful to carry out any dismissal/redundancy action with careful thought and planning for the company and the law. Unfortunately to prove they have been fair and correct in their actions it has cost considerable sums of money, causing loss of profits and damaging the pay prospects of the retained employees. For too many years the employment laws of this country have made it far to easy for ex employees to take employment tribunal action against their previous employers with virtual immunity. Hence encouraging the legalised blackmailing of companies into increased and unjustified payouts. Finally it seems like the law may be changing and employees need to be careful of unjustified and vexatious claims for fear of having costs awarded against them. Result ! About Time ! Well done MSXI ! I must admit surprise at Bay Jordan’s comments ! I question whether they are politically motivated or just naïve. No company in this day and age makes people redundant without serious consideration before, during and after the event. The fact that they won their case proves that MSXI did this correctly in a justified and correct manner. To have been awarded cost also shows that the Tribunal found the ex-employees cases to be of no merit or costs would not even be considered.
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