In the UK and Isle of Man, a costs order may be made by an Employment Tribunal to cover associated hearing costs of a party. However, Jersey's Employment Tribunal (the Tribunal) does not have this ability at present.

The issue of whether costs should be awarded by the Tribunal is a topic of much debate. The general thrust of argument against equipping the Tribunal with powers to award costs is that there should not be a financial deterrent that potentially prevents a worker from bringing an employment claim for fear of an adverse costs order. An alternative view is that the ability to award costs would be a sensible deterrent to try and prevent respondents needlessly incurring time and cost defending claims which have little or no merit.

Looking across the pond, the Guernsey Employment Tribunal has adopted an inventive approach by permitting costs to be awarded in certain circumstances. The Employment Protection (Recoverable Costs) Order 2006 provides no costs may be recovered by a party in respect of legal presentation costs, however, some costs and expenses are recoverable by a party such as witness costs, administration costs and the party's own costs.

An interesting situation arises when a respondent has accepted unfair dismissal of an employee and is prepared to pay what it is obliged to under the Employment (Jersey) Law 2003 (the Law). Due to the Tribunal's inability to award costs, what protection is a respondent afforded in such circumstances when an applicant seeks to attend a hearing despite being offered everything it can expect to recover?

In a case founded on a similar background, Simon Hurry acted for the respondent. Despite the respondent's concessions of procedural unfair dismissal and the amounts that were payable pursuant to the Law, the applicant, a litigant in person, persisted in attending a hearing. Importantly, the applicant was intent on recovering amounts which the Tribunal simply could not award, which included legal costs. The applicant also had the benefit of advice from the Jersey Advisory Conciliation Service, who had appropriately explained that these claims would not be considered by the Tribunal. The applicant plainly ignored this advice, to its detriment.

An open letter was sent on behalf of the respondent in advance of the hearing setting out what the respondent was prepared to pay and why a Tribunal attendance was both a waste of time and cost. This letter was designed to protect the respondent's position, and ultimately provided the foundation for an application under Article 77F(10) of the Law which permits the Tribunal to reduce an unfair dismissal award in circumstances which it considers "just and equitable". The respondent recognised that it could not recover any costs defending the applicant's claims, with the only avenue of recourse being an attempt to discount the unfair dismissal award.

Submissions were made that the pursuit of claims which are outside the scope of the Tribunal's powers can only be described as an abuse of process. Further, in respect of the applicant's properly founded claims, amounts had been offered pursuant to the Law well in advance of the hearing. The Tribunal was drawn to the issue of setting a dangerous precedent in permitting an applicant to behave in such a manner without being subject to a discounted award.

The Tribunal was persuaded by the argument in support of the application for a reduction. It held that the applicant had used a day of the respondent's time and also the Tribunal's time which could have been spent hearing cases where the areas of claim are not agreed or conceded in advance of the hearing.

The Tribunal considered that in the circumstances it would be just and equitable to reduce the applicant's compensation for unfair dismissal by 65%, amounting to approximately £18,500.

While the issue of costs awards will no doubt continue to be the subject of rigorous debate in Jersey, the Tribunal's approach provides reassurance that an applicant who seeks a hearing to recover amounts which are either agreed, or outside the Tribunal's jurisdiction, does not necessarily do so risk free.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.