Claims in relation to outstanding monies may be pursued by an employee in the employment tribunal or the civil courts. Which is the more appropriate venue will depend on the particular circumstances. Generally, though, it will be an abuse of process to try and litigate the same matter in two different venues. In Lycatel Services Ltd v Schneider the proper approach to assessing which was the more appropriate judicial venue was examined by the Employment Appeal Tribunal (EAT).
Mr Schneider had been employed for 13 months by Lycatel Services Ltd before being summarily dismissed for alleged gross misconduct.
Following his departure, he brought a claim for wrongful dismissal and unauthorised deductions from wages in respect of his bonus entitlement in the sum of £7,995,124.89. He also expressly reserved his right to bring proceedings in the High Court in respect of the bonus payment.
The employer submitted a response stating that he had been lawfully dismissed and disputed his entitlement to the bonus payment. In addition, despite no claim having been submitted in the High Court, the employer also made an application to the High Court for ‘negative declaratory relief’ which in effect asked for a declaration to be made that it was not liable for the bonus monies even though no claim had been made for them in that court.
Regarding the actual claim, a request was made that the employment tribunal stay the proceedings pending the High Court decision.
An employment judge refused the application on the grounds that it was for the claimant to decide in which venue to pursue the case and the tribunal was able to adequately deal with the issues in dispute. The employer appealed.
The appeal was successful. In refusing the application to stay the tribunal proceedings, there had been too much reliance placed on the fact that the issues in dispute could be adequately dealt with in the employment tribunal.
What should have been taken into account were the complexities of the arguments raised and which would be the most appropriate judicial venue for this claim to be considered.
There had wrongly been a presumption in favour of the claim proceeding before the employment tribunal.
The EAT held that given the complexity of the arguments, the amount involved and the appropriateness of the more formal procedures that would apply in the High Court, a stay of the tribunal proceedings should have been granted.
It also considered it relevant that while the costs in the High Court might prejudice the claimant, the employer had agreed that the costs regime of the tribunal should still apply.
Generally, an employer will not be able to dictate in which forum a claim is brought and the fact that High Court proceedings were commenced for a declaration while there were proceedings already instigated in the employment tribunal was unusual.
However, the employment judge’s description of that course of action being ‘perverse’ was held to be wrong on the facts of the case. It was relevant that the claimant had initially indicated an intention to litigate in the High Court which suggested that he may have also considered that to be the more appropriate forum.
Clearly the fact that the claimant is at risk of a costs award if unsuccessful in the High Court may act as a deterrent to bringing claims in that venue and will be a significant factor in assessing where the claim should proceed.
The decision highlights that if the employer should agree that the costs would be subject to the same principles that would apply in the tribunal the removal of the risk might be a significant factor as it was here described as ‘a material determining factor’ tipping the balance in favour of the High Court being the more appropriate venue.
Chris Thompson is an employment partner at Gateley Legal