DGF Ltd v O'Neil

An Employment Tribunal must determine issues only after giving the parties a fair opportunity to make submissions on them. A Tribunal acts contrary to natural justice where it forms a final view on a Polkey deduction without receiving or canvassing submissions on that issue. On remission, the parties may make submissions, but a party should not obtain a second opportunity to adduce evidence where the evidential opportunity existed at the original hearing.

The Respondent appealed against an Employment Tribunal’s unfair dismissal decision and compensation award. The liability challenge had been dismissed at a preliminary hearing, but the appeal proceeded on the Tribunal’s decision to make no Polkey deduction.

The Tribunal had considered the issue during deliberations without the parties addressing it in evidence or closing submissions. The central questions were whether this caused procedural unfairness and, if so, whether the remitted reconsideration should permit further evidence.

1. The appeal was allowed on the Polkey issue. The Employment Tribunal had formed a final view that no deduction should be made without first receiving or canvassing submissions from the parties.
2. That course was a procedural irregularity contrary to fundamental principles of natural justice and fairness. The absence of a clearly defined division between liability and remedy did not transfer responsibility for identifying the issue to the Respondent where the parties’ submissions had addressed only liability.
3. The matter was remitted to the same Employment Tribunal for reconsideration. The parties could make submissions on the Polkey question, but neither party could adduce further evidence. The opportunity to establish the evidential basis for the submission had existed at the original two-day hearing, and allowing further evidence would give the Respondent a second opportunity.

• Employment Appeal Tribunal: the liability grounds had been dismissed at a preliminary hearing, but the Polkey grounds proceeded to the full hearing. The appeal was allowed on those grounds and the issue was remitted.