West Lothian Council v Aziz

In assessing compensation for unfair dismissal, an Employment Tribunal may make predictions about what would have occurred had a fair procedure been followed. Those predictions must have a proper and identifiable basis in material, credible and reliable evidence. A tribunal must not substitute its own assessment for evidence bearing on contingencies controlled by third parties or professional decision-makers.

Where there is no evidential basis for a finding that the employee would probably have completed professional training, obtained admission to a profession and secured subsequent employment, compensation for those hypothetical losses cannot stand.

The claimant was employed under a two-year fixed-term contract as a trainee solicitor. He was dismissed before its expiry. The Employment Tribunal found the dismissal procedurally unfair and awarded compensation on the basis that, following a fair procedure, his traineeship would probably have been extended, he would have qualified as a solicitor, and he would then have obtained work as a solicitor.

The employer appealed only against compensation. It contended that the Tribunal had no evidential basis for those predictions, had misunderstood the powers of the Law Society of Scotland, and had substituted its own assessment for the professional evidence about the claimant's competence and suitability.

1. Appeal allowed. The compensatory award was set aside. The Tribunal's finding of unfair dismissal was unaffected, and the EAT substituted an award of the basic award only, £402.

2. Under section 123 of the Employment Rights Act 1996, compensation requires an assessment of loss attributable to the dismissal. That may require a prediction of what would have happened had a fair procedure been followed, including in a Polkey exercise. A tribunal must not avoid prediction merely because it involves uncertainty. However, each prediction must rest on material, credible and reliable evidence.

3. The Tribunal had no evidential basis for its central prediction that the claimant had a 90% prospect of receiving a six-month extension, qualifying as a solicitor and obtaining employment as one. It assumed both that the employer would agree to an extension and that the Law Society of Scotland would permit it, although the relevant regulations gave the Society's Council a discretionary power exercisable only in exceptional circumstances.

4. The Tribunal also failed to address material contrary evidence: the employer's unchallenged professional assessment that the claimant would not reach the required standard; concerns bearing on whether he was fit and proper to be admitted; and the Society's refusal to credit him with 18 months' training when considering a possible assignation. Its reliance on numerical review scores and extrapolation from first-year improvement could not support the conclusion reached.

5. Sympathy for the claimant should not have influenced the compensation assessment. The Tribunal's speculative award for post-training and future solicitor earnings therefore required to be set aside in its entirety.

• Employment Appeal Tribunal: Allowed the employer's appeal against compensation and substituted a basic award of £402.
• Employment Tribunal, Glasgow: Judgment registered on 15 May 2012. Found the dismissal procedurally unfair, rejected the disability discrimination claim, and awarded £30,597.62.