Allma Construction Ltd v Laing

When assessing compensation for procedurally unfair dismissal, an Employment Tribunal must consider both the chance of dismissal following a fair procedure and any reduction for the employee’s causative conduct. A contribution reduction focuses on the claimant’s own conduct and its causal connection with dismissal; comparative treatment of another employee does not justify limiting the reduction. Deliberate and serious breach of an important health and safety rule may make a very low reduction perverse. An uplift under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 requires reasoned findings on breach, unreasonableness, justice and equity, and the appropriate percentage.

The employee’s dismissal was conceded to be procedurally unfair. The Employment Tribunal nevertheless found substantive unfairness, reduced the basic and compensatory awards by 5% for contribution, and applied a 25% uplift under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992.

The employer appealed, challenging the finding of substantive unfairness, the contribution assessment, the failure to consider a possible Polkey deduction, and the inadequacy of the reasons for the uplift. The central issues were whether the Tribunal had misunderstood the health and safety facts and whether its evaluative conclusions were legally and evidentially sustainable.

1. Appeal allowed. The case was remitted to a freshly constituted Employment Tribunal for rehearing.
2. The Tribunal misapplied the Burchell test. The facts establishing the misconduct were not materially in dispute, and the employer was plainly entitled to believe that the employee had operated the saw without effective water suppression. The Tribunal had no evidential basis for finding that this conduct was condoned. The fact that another employee received a written warning, together with a warning of dismissal for any further health and safety breach, did not amount to condonation.
3. The Tribunal also failed to take account of its finding that effective water suppression could be achieved by a hose as well as by a water suppression bottle. Its reasoning therefore failed to address a relevant factor and focused on the mechanism rather than the absence of effective dust suppression.
4. Because the finding of substantive unfairness was unsustainable, the Tribunal had failed to consider whether a Polkey deduction was required in relation to the conceded procedural unfairness. The Tribunal would have to assess the chance that dismissal would have occurred after a fair procedure, allowing for the inherent uncertainty of that exercise.
5. On contribution, sections 122(2) and 123(6) of the Employment Rights Act 1996 required attention to the employee’s conduct, whether it caused or contributed to dismissal, and what reduction was just and equitable. The Tribunal’s apparent reliance on condonation and comparative justice was flawed. The employee’s deliberate conduct, serious health and safety risk, and exposure of the employer to statutory enforcement meant that a 5% reduction was perverse.
6. The 25% uplift was inadequately reasoned. The Tribunal had not explained the respects in which the ACAS Code was breached, why any breach was unreasonable, why an uplift was just and equitable, or why the maximum percentage was appropriate, particularly given the full appeal procedure.

• Employment Tribunal, Glasgow: found the dismissal procedurally and substantively unfair, reduced the basic and compensatory awards by 5%, and applied a 25% uplift.
• Employment Appeal Tribunal: allowed the employer’s appeal and remitted the case to a freshly constituted Employment Tribunal for rehearing.