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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Sumukan (UK) Ltd & Ors v Raghavan [2009] UKEAT 0087_09_1905 (19 May 2009) URL: http://www.bailii.org/uk/cases/UKEAT/2009/0087_09_1905.html Cite as: [2009] UKEAT 0087_09_1905, [2009] UKEAT 87_9_1905

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APPEARANCES

 

For the Appellants	MS J McNEILL QC (One of Her Majesty's Counsel) Messrs Dale Langley & Co Solicitors 60 Lombard Street London EC3V 9EA
For the Respondent	Written representations


 


SUMMARY

PRACTICE AND PROCEDURE: Perversity

UNFAIR DISMISSAL: Compensation

1. The judgment of the Employment Tribunal was not perverse notwithstanding the fact that two out of the three reasons advanced by the Employment Tribunal for regarding the evidence of the managing director of the first appellant as not reliable were unsound. The third reason was supported by evidence.
2. There was an error of law by the Employment Tribunal on the question of compensation by not crediting the sums actually received by the Respondent against the award of compensation wrong; this was so even if the point had not been argued below because it was obvious.
3. It was not an error, however, to fail to give credit in respect of benefits in kind where this had not been argued below; the point was not obvious.
4. The award of £500.00 costs was not adequately reasoned.
5. Counterclaims, which have previously been revoked, cannot be dismissed.


 


HIS HONOUR JUDGE HAND QC

6. This is an Appeal from an Employment Tribunal, comprising a judge and two lay members, sitting at Watford over five hearing days in April 2007 and November 2007, the reserved judgment, having been sent to the parties on 19 February 2008. By that reserved judgment, the Tribunal held that the Respondent to this appeal, Balaji Raghavan, who was the Claimant below and who we will refer to as the Claimant, had unauthorised deductions of £24,567.42 made from his salary contrary to Section 13 of the Employment Rights Act 1996. Compensation was ordered in that amount to be paid by the First Appellant, Sumukan Ltd, which we will refer to as Sumukan UK. Costs of £500 were ordered to be paid by Sumukan UK and the Second Appellant, Sumukan BVI Ltd, who we will refer to as Sumukan BVI.
7. As a result of a Rule 3 paragraph 10 hearing before HHJ Serota QC on 29 January 2009, it was directed that this Appeal should proceed to a full hearing on a limited number of points as set out in his order and directions dated 30 January 2009. As a result, we have before us the following issues:

(i) was the judgment of the Employment Tribunal and, in particular, paragraph 31 of the judgment, perverse?

(ii) was the decision on compensation wrong because

(a) sums actually received by the Claimant have not been credited by the Employment Tribunal against the overall amount of compensation and,

(b) the benefit in kind of accommodation and food that was provided by Ms Jananayagam, who was an officer of Sumukan UK, was not so credited?

(c) was the decision to award £500 costs without any reasoned basis?

(d) was the decision to dismiss the counter claim wrong in law?

8. Ms Jane McNeill QC has appeared on behalf of Sumukan UK and Sumukan BVI. The Claimant has not appeared. He is in India. He has had the benefit of work done on his behalf by solicitors, the Chancery Partnership, who act, in effect, pro bono. We have had a very full skeleton argument prepared by them placed before us as well as an email from the Claimant, to which is attached a witness statement.
9. Ms McNeill QC observes, and we think correctly, that some aspects of the skeleton argument and some parts of the statement relate to matters that are either factually in dispute or cannot be part of this appeal because they are not the subject of any specific orders or directions of this Tribunal. We have paid no attention to them.
10. We can deal with issue (ii)(d) mentioned above immediately. At paragraph 8 of the judgment of the Employment Tribunal the following appears:

"On 23 January 2007, both Respondents presented their counterclaims to the Tribunal. It was a document accepted by the Tribunal Vetting Officer. However, when the matter came before this Tribunal it was clear that the Respondents did not provide reasons for the late presentation of their counterclaims. As a result the acceptance of the counterclaims was revoked and this Tribunal ordered the Respondent to make an application for leave by 4 pm on 2 May 2007, giving reasons why the counterclaims should be accepted. No such application was made and the counterclaims were not pursued during the course of the hearing. Accordingly, the Tribunal dismissed both counterclaims."

11. In that paragraph it is apparent that the Tribunal is recording both the fact that the counterclaims had been revoked and also that the counterclaims had been dismissed by the order of the Tribunal. That is also dealt with elsewhere in the judgment. Plainly, if the counterclaims had been revoked they could not have been dismissed.
12. This is also explained by the Employment Tribunal in material that came into existence as a result of questions directed to the Employment Tribunal consequent upon the judgment given by Judge Serota and the directions that he made. The Employment Tribunal, in a letter to this Tribunal, dated 5 March 2009 (and also 6 March), answered questions that had been asked pursuant to the order made by Judge Serota. So far as the counterclaim issue is concerned, the Tribunal give the following answer at paragraph 2(iii) on page 60.8 of the EAT bundle:

"The Counterclaims were revoked by the Tribunal. As the Tribunal was not provided with any reasons to explain the late presentation of the Counterclaims, the revocation stood. Reference to the Counterclaims being dismissed was an error on the Tribunal's part."

13. In those circumstances it is clear that the Tribunal, as the Tribunal accepts, fell into error and the appeal must be allowed on that point. Accordingly the dismissal of the counterclaims will be quashed.
14. Before turning to the main issue on this appeal, namely the question of perversity set out in issue (i) above, it is necessary to sketch in some of the background to the case by reference to the Employment Tribunal's judgment. The findings of fact start at paragraph 11 of the judgment (page 4 of the EAT bundle); paragraph 11 is a very long paragraph divided into 37 sub-paragraphs. In addition we think that set out in paragraphs 27, 28 and 29 of the judgment there are some other findings of fact, either as a summary of earlier findings or as entirely new free-standing findings.
15. The Claimant was offered a position by the Asset Management Shop Limited as a result of a letter, dated 29 August 2000, written by Ms Jananayagam in her capacity as managing director of the predecessor of Sumukan UK, page 62 of the bundle. The letterhead is that of the Asset Management Shop. The address is an address in Pinner, and at the foot of the page, the Asset Management Shop Limited is said to be registered in England and the company number is given. That address appears in a subsequent document as the registered address of Sumukan UK.
16. By the first paragraph, the Claimant is offered employment "as a senior analyst/programmer within the Technology Division of the Asset Management Shop Limited" at a commencing salary of 10,000 Indian rupees per month. By the fifth paragraph, it is said that the Claimant is to be based in Chennai (in Tamil Nadu in southeast India) although it is also said that he may be required "to work for a subsidiary of the firm or in a different geographical location". He worked for the Asset Management Shop in an office in Chennai with three others.
17. The Asset Management Shop had been incorporated on 7 October 1998. The Certificate of Incorporation appears at page 61 of the EAT bundle and the Asset Management Shop subsequently became Sumukan UK on 9 July 2002. In 2001 it had four software projects, one of which comprised work in the United Kingdom. New clients were anticipated although they would be likely to be outside the United Kingdom. As a result of that, as recorded at paragraph 11.2 of the Employment Tribunal's judgment, an offshore company, Sumukan BVI, was incorporated on 2 August 2001 in the British Virgin Islands.
18. Sometime later, Ms Jananayagam decided to form a partnership comprising herself, the Claimant and somebody called Mr Gopinath and at pages 86 to 90 in the EAT bundle the partnership deed is set out. It is unnecessary to refer to its terms in detail. It took effect from 14 January 2002 and the basis of the partnership was to develop software for both Sumukan UK and Sumukan BVI.
19. Sumukan UK had already done some business with the Commonwealth Secretariat in relation to an IT consultancy with the Namibian government. These matters are recorded at paragraph 11.3 of the judgment on page 5 of the EAT bundle. This, submitted Ms McNeill, is a very important paragraph in the judgment. It reads as follows,

"In 2001, the Asset Management Shop Ltd had a contract with the Commonwealth Secretariat to provide an IT consultancy to the Namibian government. The first phase was valued at around £15,000. Following conclusion of the contract it was anticipated that further contracts would follow, the revenue being in the region of £300,000 per annum mainly made up of software licensing fees. This was to be the second phase. It was with this prospect in mind that Ms Jananayagam applied for a work permit for the Claimant."

20. The last sentence, in particular, was emphasised by Ms McNeill in her submissions. It was, she submitted, in effect, an acceptance by the Employment Tribunal that salary in the United Kingdom whilst working for Sumukan UK was conditional upon the Commonwealth contract coming to fruition. It was to be read, she submitted, with the first sentence of paragraph 11.1(8), which recorded at a later date, probably towards the end of 2002 or the early part of 2003, that, "The hoped-for second phase of Commonwealth contract did not materialise". Indeed, the paragraph goes on to say that far from there being amicable relations, the situation had deteriorated to the extent that there was, firstly, a dispute and then litigation.
21. The Claimant had an application for a work permit made on his behalf on the premise that he would be coming to the United Kingdom. This is dealt with at length by the Employment Tribunal, who plainly thought it was an important, if not critical, document.
    

Discussion of it occupies paragraphs 11.4 to 11.10. Part of paragraph 11.4 reads as follows:

"We find as fact that Ms Jananayagam then had a discussion with the Claimant about increasing the salary to be paid to him to £27,000. He agreed and the application was amended by way of an appeal by Ms Jananayagam. The salary element was, therefore, increased to that amount."

22. This was returned to by the Employment Tribunal at paragraph 11.8. There in the fourth sentence at paragraph 11.8, the Tribunal say:

"We have already referred to the discussion between the Claimant and Ms Jananayagam prior to her letter of appeal about being paid a salary of £27k. In support of this finding of fact we rely on the Claimant's evidence that such a discussion took place and on the evidence given by Ms Jananayagam. She stated, in answer to questions put to her by the Tribunal, that she did not offer the Claimant work in the UK and that she had stated to him that he should not expect of a salary of £27k. Despite being assiduous in her drafting of documents, she did not have a record of her making such statements. We are of the view that the Respondents' failure to provide the internet conversations between the Claimant and Ms Jananayagam during the period, in November 2002, immediately prior to the Claimant's departure to the UK, damages their case because they were likely to cast some light on the discussions regarding his work and salary in the UK. We accept the Claimant's evidence that living on £300 per month in London, that being his equivalent Indian salary, was grossly inadequate hence his agreement to £27k."

In that paragraph there is also reference to another topic that the Tribunal concentrated a lot of its judgment on, namely the "Yahoo! Chats". We shall need to return to those in due course.

23. The last word as to the facts relating to the work permit is to be found at paragraph 11.37. By then it seems clear that the Tribunal was concerned as to whether or not the work permit was an accurate and straightforward document. Paragraph 11.37 reads,

"During the course of the cross-examination of the Claimant by Ms Sethi, it was put to the Claimant that although Ms Jananayagam stated on the work permit that he would be paid £27k she had no intention of paying him that salary. The Tribunal pointed out to Ms Sethi that it was concerned that what was stated in the work permit application form appeared to have been misleading in that Work Permits UK believed that that salary would be paid. The Tribunal later adjourned for lunch. After the adjournment, Ms Sethi withdrew from the case stating that she was professionally embarrassed. She cited paragraphs 603(c) and 606 of the Bar Council's Code of Conduct."

24. The issue as to the work permit is one that was regarded by the Employment Tribunal as very significant. At paragraph 11.8 referred to above, the Tribunal seemed to have thought that there was an issue as to when Ms Jananayagam first raised the question of the payment of £27,000. At paragraph 11.8 the Tribunal say that they rely,

"on the Claimant's evidence that such a discussion took place and on the evidence given by Miss Jananayagam."

The reference to reliance upon Ms Jananayagam appears to have been rather in the negative than the positive. However, paragraph 11.8 ends by the Tribunal accepting the Claimant's evidence that living on £300 per month in London was grossly inadequate, "hence his agreement to £27,000.". In other words, the Tribunal at that point appears to be accepting the Claimant's account in relation to the £27,000 on the basis not only that it did not accept Ms Jananayagam's account but also on the basis that his account was supported by the commonsense or domestic economics of it not being viable to live in London on the Indian salary.

25. What happened next was that the Claimant arrived in the United Kingdom on a visitor's visa for six months and he lived at Ms Jananayagam's home where he was provided with accommodation, food and expenses. He was given £200 in cash on his first day and he worked at premises in Kingsbury Road. He also made a presentation at the University of Warwick on behalf of Sumukan UK and he was provided with a business card, which, the Tribunal noted at paragraph 11.16, provided details of the company. It has to be said that when one examines the card, it is silent as to whether the Sumukan that is displayed on the card is Sumukan UK or Sumukan BVI although the address is that given in the work permit application as the address of Sumukan UK.
26. The Claimant was the only programmer working in the Kingsbury office. He did some work in connection with some kind of investment or broking business that appears to have had some connection with Ms Jananayagam and in May, just before he left for India on 14 May, he signed a document entitled "An Addendum of the Employment Contract", which confirmed that he had been employed, in fact, by Sumukan BVI whilst in the United Kingdom albeit he had been on secondment to Sumukan UK. When back in India he worked in the Chennai office and he returned to the United Kingdom on 13 September 2003. The day before he returned, Ms Jananayagam wrote a letter dealt with at paragraph 11.21 of the Employment Tribunal's Decision. That paragraph, including the quotation from the letter, reads as follows:

"In order to facilitate his return to the UK, Ms Jananayagam wrote a letter dated the 12 September 2003, addressed to 'Whom it may concern' confirming that he worked for Sumukan Limited (UK). It stated:

"Mr Balaji Ragahavan is currently employed as a senior software engineer with Sumukan Limited (formerly 'The Asset Management Shop Ltd', Company No: 3646017) and is returning to the UK on the company's business. We were previously issued a 24-month work permit for him in June 2002 and he will be travelling to the UK on that work permit/visa to resume his previous stay… ."

27. This period after his return September 2003 proved unsatisfactory so far as the Claimant was concerned. He did some work, as recorded by the Employment Tribunal in paragraphs 11.22 and 11.23 and 11.24, over that period but became increasingly disenchanted and left the employment of either Sumukan UK or Sumukan BVI on 4 June. Thus he had been in the United Kingdom for three periods of about six months each and during that time, as he had told the Tribunal, he had received the sums that are set out at paragraph 11.29 of the judgment and which amounted to £3,200.
28. As we have already indicated, some considerable part of the judgment is devoted to the so-called "Yahoo! Chats". These are referred to in paragraph 11.8. The Tribunal returned to them at paragraph 11.30 and from then onwards down to paragraph 11.35 there is recitation from and discussion about these chats. "Yahoo! Chats", as we understand it, are an instant messenger service whereby people can "talk" to each other via computers connected to the internet. One party types in a message or a conversation. The other party receives it a very short time later and can type in a reply, which is then transmitted back to the first party. The Tribunal found that a good deal of the communication which had taken place between the Claimant and Ms Jananayagam had been by this medium.
29. In the end, the Employment Tribunal rejected the Claimant's contention that such chats could be altered and expressed themselves to be confident that the "Yahoo! Chats" that had been produced to them were authentic and had not been adulterated in any way. There were, however, concerns about the absence of any traffic for the period from early November 2002 to the end of 2002. The Tribunal expressed itself as concerned about that at paragraph 11.8. Similarly, they raised concern about it in the last sentence of paragraph 11.35. As we shall see, the Tribunal return to this later in paragraph 31.
30. The issues in the case were identified by the Tribunal at paragraph 7 as follows:

"The parties invited the Tribunal to consider the following issues:-

(i) Was the Claimant a worker?

(ii) Was he working under a contract of employment, whether express or implied?

(iii) Was he employed by Sumukan Limited (UK)?

(iv) Was he employed by Sumukan Limited (BVI)?

(v) If employed, what was the salary agreed and what was paid?"

31. Having identified those issues, the Tribunal made findings of fact and then, between paragraphs 13 to 26, discussed the law. It is not suggested that there is any misdirection as to the law in that lengthy discussion. Ms McNeill QC submits that really the whole of the task that faced the Employment Tribunal at the end of all this was simply whether the Claimant, or Ms Jananayagam, was to be believed and, in particular, to be believed as to the terms upon which the Claimant was to come and work in the United Kingdom. Was it, as the Claimant said, consistent with the information supplied on the application for the work permit that he was to be paid £27,000 or was it, as Ms Jananayagam said, conditional upon obtaining the Commonwealth Secretariat IT consultancy contract or retaining it?
32. In turn, all of that, submits Ms McNeill, distils down to paragraph 31 of the Employment Tribunal's judgment. That reads as follows:

"Ms Jananayagam's credibility was an issue. She had stated to Work Permits (UK) when she applied for a work permit that the Claimant was going to be paid £27,000 per annum and that he was going to be engaged in work on behalf of Sumukan Limited (UK). She said in evidence that she did not intend to pay that sum of money. Is she was prepared to mislead Work Permits (UK) (sic); had not complied with the Tribunal's order of the 8 June 2006 in respect of shareholdings and directorships (sic); and the relevant Yahoo! chats for November 2002 were not provided, then the Tribunal concluded that her credibility was in issue. Her evidence during the course of the hearing carried little weight."

33. Ms McNeill, in her cogent and straightforward submissions, has simply invited analysis of the three factors which the Tribunal refer to in paragraph 31. These are the work permits; the non-compliance with the Tribunal's order of 8 June; and the absence of the Yahoo! chats for the end of 2002. Ms McNeill submits that if the reasoning there cannot be sustained then the judgment relative to Ms Jananayagam's credibility collapses and with it the decision itself. In other words, if the reasoning that underpins the finding in the last sentence of paragraph 31, that Ms Jananayagam's evidence "carried little weight", collapses then so does the findings against the Appellants.
34. When one looks at these three factors, submits Ms McNeill, there is really nothing in any of them. We partly agree with those submissions. So far as the "Yahoo! Chats" are concerned, it seems to us that, at best, this is a neutral factor. There is no documentation to corroborate or contradict the conversations that are alleged to have taken place or not taken place towards the end of 2002 and in 2003. This is either because the material does not exist or because it has been deliberately suppressed or (as Ms McNeill has reminded us) it was never produced because the Claimant submitted, and the Tribunal accepted, that no further written material should be put before the Tribunal, so, in effect, if the material existed Sumukan UK and Sumukan BVI were precluded from producing it. There is no way of knowing whether one of these alternatives is more likely than any of the others. In the end, there simply is no documentary evidence but, submits Ms McNeill, it is entirely wrong to draw any inference about the credibility of Ms Jananayagam from the fact that the material was not available and we accept that submission.
35. Nor can we understand why the Tribunal thought that it was of great significance that the order of 8 June 2006 had not been complied with. The order is at pages 46 and 47 of the bundle. At paragraph 3 it provided that:

"Mrs Jananayagam who was present at the Case Management Discussion, do provide the Tribunal and the Claimant with the following information:-

(a) details of who were the Shareholders, giving the extent of their shareholdings, of Sumukan (UK) Limited both as of 8 June 2006 and between the dates of 22 November 2002 and 4 June 2004 and further the identify of the Director(s) and Company Secretary for those aforementioned dates;

(b) the like information in respect of Sumukan (BVI) Ltd. Such information to be provided on or before 30 June 2006."

36. That order was not sealed immediately and not sent out until early July. It was, in fact, addressed to Mrs A Jananayagam, who is the mother of Ms Jananayagam. In those circumstances, it is perhaps not surprising that the order was not completely complied with. In any event, information was supplied. The matter came back before the Tribunal as the result of an e-mail sent to the Tribunal by the Claimant on 24 July. It seems reasonable to infer from a letter sent out by the Tribunal on 14 August 2006 that the Claimant had made reference in that e-mail, which we have not seen, to a strike out but the Claimant was informed that a strike out would only be considered if a formal application was made. It seems clear that no such formal application was made and this issue simply petered out with no particular importance being attached to it until the Employment Tribunal hearing and until its appearance in the judgment at paragraph 31. We do not think anything adverse to Ms Jananayagam can be derived from this sequence of events
37. The third matter, and the most important matter, relates to the work permit application. Ms McNeill submits that the reference to the work permit in paragraph 31, which is bedevilled by typographical errors and so is not entirely coherent, simply consists of a misunderstanding by the Tribunal of the evidence that it itself had sifted and made findings of fact about. The Tribunal should have understood that the offer of employment at £27,000 by Sumukan UK was, in effect, conditional on the Commonwealth Secretariat contract being retained and coming to fruition. The Tribunal had failed to register that the conversation that Ms Jananayagam said that she had had with the Claimant indicating that she could not pay £27,000 a year was well after the work permit had been obtained. It was possibly in June or even later than that when it became clear that the business was not to be retained or carried forward.
38. In so far as the Tribunal appears to have had other reservations about the work permit, Ms McNeill submits those reservations are, in effect, extraneous to paragraph 31. It is true, Ms McNeill accepts, that paragraph 33, which reads:

"If the Claimant was not an employee of Sumukan Limited (UK), she ought to have informed Work Permits (UK) of that fact and she did not."

amounts to a criticism of Ms Jananayagam. But, Ms McNeill submits, paragraph 33 is not really connected to paragraph 31 at all and, like much of what the Tribunal has to say about the work permit, it translates things, which simply are not the responsibility of Ms Jananayagam, into obligations on her part to make disclosure. She was not under any obligation to tell Work Permits UK that the Claimant was not an employee of Sumukan UK, although we observe such was, of course, Ms Jananayagam's contention throughout. There was, however, submitted Ms McNeill, no reason why these matters needed to be articulated and given expression in the application form.

39. We do not accept Ms McNeill's submission that the Tribunal was not entitled to be critical of Ms Jananayagam's work permit application. If there was an issue as to conditionality, then, although we accept that she was under no absolute obligation to raise it, the letter of appeal makes clear (see page 77 of the EAT bundle) that the refusal of the first work permit application related to reservations on the part of the Agency in relation to the level of salary. Ms Jananayagam is at pains in the letter of 27 February 2002 to explain that the salary has been increased. This answers the anxiety as to the level of salary and as to whether or not in 2002 in the United Kingdom it was an appropriate salary to be paid to somebody fulfilling the job specification that was outlined in the work permit application. If, as appears to have been the case, this level of salary was entirely conditional, and may well not be paid at all then we do not think that it was an error on the part of the Tribunal to ask itself whether it thought that a person, who answered doubts as to the appropriateness of a salary, by proposing an increased level of salary, without indicating that it was conditional on contracts being obtained, was entirely credit worthy.
40. In paragraph 11.8 to which we have already referred, there is a reference to the competing versions of events put forward by the Claimant and the managing director of Sumukan UK, Ms Jananayagam. The Tribunal says that her version of the conversation was not supported by any documentary evidence. The last sentence of paragraph 11.8, as we have already pointed out, relates to the commonsense domestic economics. What the Tribunal appears to have thought in relation to paragraph 11.8 is that whilst the Claimant had the domestic economics to support his account there was no thing to support the account of Ms Jananayagam and such material as there was, like the work permit applications, in fact suggested that £27,000 was to be paid.
41. This appears to have been what concerned the Tribunal at paragraph 11.37. Even if the intention to pay less had been formed at a later stage the Tribunal's real concern was the way in which this matter had been dealt with at the time of the application for the work permit. The way it is expressed at paragraph 31, in a sentence which reads, "is [presumably "if"] she was prepared to mislead Work Permits UK," appears not to be a question but a statement that Ms Jananayagam was prepared to mislead Work Permits UK. It may be that Ms McNeill is right to suggest that the word "mislead" is a little harsh but Ms Jananayagam was prepared to give Work Permits UK the impression that the job being offered was being offered by Sumukan UK and was a firm offer of a job at £27,000. According to Ms Jananayagam's account, in two respects that was not entirely accurate. Firstly, the salary would only be £27,000 if certain contracts came to fruition and, secondly, the Claimant was not an employee of Sumukan UK but a BVI employee. The Tribunal, at paragraphs 11.5 and 11.6 of the judgment, had quoted from the application form. It seems to us that the purpose in doing so was to highlight the fact that the answers provided by Ms Jananayagam neither reveal that the Claimant was an employee of BVI nor that there was any conditional element about the appointment.
42. In saying this we bear in mind that Ms McNeill has pointed out that it was entirely accurate for Ms Jananayagam to have answered the questions in the application form in the way that she did. That may be so but it seems to us the Tribunal were entitled to think that here was somebody who might be prepared to put the best possible gloss on a situation and might not be prepared to reveal certain difficulties if she felt it was disadvantageous to her to do so.
43. Paragraph 33 of the judgment is, in our view, an expression of that thinking. It may be strictly correct to say that there was nothing inaccurate said by Ms Jananayagam in the work permit. But, in our judgment, what the Tribunal were doing was to have regard not to the black letter of the rubric of the answers in the application form but to the spirit of them. The Tribunal had a basis for regarding it as not being a completely open and straightforward application and they were, in our judgment, entitled to regard that as reflecting on the credibility of Ms Jananayagam.
44. It may be that the other two matters referred to in paragraph 31 lack rationality, as Ms McNeill put it, but we do not think that, in the part of paragraph 31 relating to the work permit, the reasoning of the Tribunal was unsupported by the evidence and we do not think the Tribunal fell into error in regarding these matters as reflecting adversely on her credibility.
45. Moreover, we do not agree that the last sentence of paragraph 31 must be regarded as only a summary of and reflection of what has gone before in the preceding five sentences of paragraph 31. We do not think that is a fair reading of the Employment Tribunal's judgment when taken as a whole. The Tribunal was not intending to confine itself by paragraph 31 to simply the issues that were raised at paragraph 31 as providing support for their conclusion that Ms Jananayagam's evidence carried little weight.
46. In our view paragraph 33 was plainly part of the thinking that led to the conclusion in the last sentence of paragraph 31. Likewise, when we look at paragraphs 27, 28 and 29, we think that these are summations as to facts already found although they may in some respects contain
    

new thinking. In particular, the last two sentences of paragraph 27 read:

"He entered the United Kingdom under a work permit applied for by Miss Jananayagam on behalf of Sumukan Limited (UK). He would not have left India for London to live on his Indian salary."

47. Paragraph 28 details working for Sumukan UK and being given a business card that the Tribunal construed as relating to Sumukan UK. We should say that whilst it can be argued, that the card was not specific to Sumukan UK, we think the Tribunal were entirely within their fact finding ambit when they concluded that it was redolent of being employed by Sumukan UK. The Tribunal notes at paragraph 28 that work was not done for anyone else and at paragraph 29, the Tribunal return to the letter of 12 September 2003, which had been quoted in paragraph 11.21 of the judgment.
48. The letter is a very clear straightforward statement that the Claimant was employed by Sumukan UK, provided for the purposes of a bank reference. Ms Jananayagam's contention and case at the Tribunal, on the pleaded case of Sumukan UK and Sumukan BVI, in the counterclaims that were raised and in the evidence, was that the Claimant had never been employed by Sumukan UK. So on the one hand she writes a letter as a reference to a bank to say that he has been employed by Sumukan UK and on the other she denies that is so. In our judgment, if that is not a basis for questioning someone's credibility, then we do not know what is. In short, we think that, whilst in some respects not as happily expressed as it might have been, the finding that the evidence of Ms Jananayagam was not evidence that carried great weight and that the evidence of the Claimant on significant issues was to be preferred, was one open to the Employment Tribunal on the facts and the conclusion was well within the fact-finding province of the Employment Tribunal.
49. In our judgment, this was not a perverse Decision and that aspect of the Appeal will be dismissed.
50. We turn then to the issue of compensation. At paragraph 36 of the Tribunal's Decision,

the issue of compensation is dealt with in the following terms:

"Having regard to our judgment, the Claimant is entitled to be paid his salary at £27,000 per annum covering the times that he was working in the United Kingdom. A schedule of the Claimant's net losses was provided by the parties covering the three periods the Claimant worked in the United Kingdom. From 22 November 2002 to 18 May 2003 his net earnings should have been £10,691.52. For the period 13 September 2003 to 10 March 2003, his net earnings should have been £10,587.90. Finally, for the period 26 April 2004 to 4 June 2004 his net earnings should have been £3,288.00."

51. The Tribunal had asked for the assistance of the parties in relation to the calculation of compensation and the result appears to have been the schedule that is set out at pages 40 to 42 of the EAT bundle. That schedule is an attempt to reduce gross calculations to net by the application of well-recognised, albeit somewhat rough and ready, principles. What is absent from the schedule is any reflection of the amounts of money received by the Claimant and there is also nothing said in the schedule about the value of any benefits-in-kind, namely, the accommodation and other incidentals referred to, but not in any way quantified in, the judgment
52. The Tribunal were asked about these figures in the Burns/Barke letter and at page 60.7 of the EAT bundle and they replied in paragraph 2(i) as follows:

"The Tribunal asked the parties to provide an agreed schedule of net losses. The schedule was provided and the net figures were taken into account in paragraph 36 of the Judgment."

53. They also replied in relation to benefits in kind in (ii) in the following terms:

"From the Judge's notes of the evidence, it is not recorded that the Respondents were submitting that all benefits in kind, including board and lodgings, should be deducted in assessing the amount of unauthorised deductions to be paid to the Claimant."

54. It seems to us the position is this. The Tribunal were well aware of the sums paid to the Claimant. He had acknowledged them. They found as a fact that he had received them. They had identified them. They did not compute them but it is a simple matter of addition to say that they amount to £3,200.
55. Even though those matters were not referred to in the schedule, in our judgment they ought to have been taken into account by the Tribunal and credited against the compensation awarded unless there is any argument that they do not represent remuneration. Because, it seems to us, that it might be possible that some sort of argument could be mounted in relation to those sums and because the matter has not been the subject of submissions, rather than ourselves dispose of it by deducting £3,200, we think, in justice to the parties, this is a matter that ought to be remitted to the Employment Tribunal for it to consider and, if necessary, to hear evidence about.
56. We take an entirely different view in relation to the benefits-in-kind. If those were to have been raised, they should have been raised at some point during the course of the hearing. This is a different situation to the £3,200 which was clearly identified during the course of the hearing. That was a matter that was right under the nose of the Tribunal and should have been dealt with. The benefits in kind, as the Tribunal say in the Burns/Barke letter, were not the subject of any submissions addressed to the Tribunal and they should have been.
57. In our judgment, it is not an error of law for the Tribunal not to deal with matters that are neither staring them in the face nor the subject of submission. It is true that they are referred to but they were not, in our judgment, of such an obvious nature that they ought to have been taken into account by the Tribunal without any request to do so. We can see no error in law in relation to that and the appeal will be dismissed so far as the benefits-in-kind are concerned.
58. Turning finally to the question of costs. These are awarded at paragraph 38 of the Employment Tribunal's judgment which reads,

"Having regard to the parties' applications for costs the Tribunal concluded that the Respondents should pay costs in the sum of £500 for failing to comply with the order of the Tribunal dated 8 June 2006 in respect of disclosing information of the shareholding, directorships of both companies. The Respondents' application for costs is refused. The Tribunal having rules that Claimant was unable to attend the hearing in January 2007 as he was suffering and was recovering from typhoid fever."

59. As can be seen from that quotation, there is absolutely no indication as to the reasoning upon which that sum has been awarded. It appears to have been awarded against both Respondents. There is nothing to record why one, the other or both of them are at fault. There is nothing to tell us the reason why that sum has been awarded, how it has been computed, under what principle it has been computed, why loss in that amount has been incurred and why that should be compensated for?
60. In those circumstances, we take the view that paragraph 38 is a totally inadequate record of the reasoning of the Tribunal and we propose to remit the question of costs. The Tribunal must state on what basis and in accordance with what established principles, it is awarding any sum of costs; on what basis it arrives at the sum of £500 and why costs are being awarded against one, other or both of the Respondents. The award relates, we would observe, to non-compliance with the very order that we have referred to above. This order seems to have simply run into the sand in the summer of 2006. There was a hint that the Claimant might seek to have the proceedings struck out for non-compliance with the order. This was followed by an indication by the Employment Tribunal that unless a formal application was made nothing was likely to be done. Thereafter there was no further momentum until the Tribunal hearing itself. There is no basis that we can see for thinking that the non-compliance with that order incurred any costs of any kind and, accordingly, the matter must be remitted for the Tribunal to reconsider the question of costs.
61. So the appeal will be dismissed in relation to perversity. It will be allowed, in part, as to the question of compensation and it will be allowed on the question of costs. The matter will be remitted to the Tribunal for it to rehear the issue of compensation in relation to the £3,200 and to reconsider the question of costs and set out, if that award is to be maintained, its reasoning as to why costs are to be awarded.