Pybus v Geoquip Ltd

An Employment Tribunal must give sufficient reasons to show how it resolved each material issue argued before it. Reasons are inadequate where they omit any consideration of a pleaded and argued constructive-dismissal contention that could materially affect the period of compensatory loss. The omission is an error of law even if the tribunal considered related possibilities, such as voluntary resignation.

The distinct appellate grounds of irrationality and perversity require their own demanding tests. An unexplained failure to address a material issue is properly characterised as an omission in reasoning, rather than as perversity or irrationality.

The claimant had been found unfairly dismissed. Following earlier remedies proceedings and an earlier successful appeal concerning a Polkey reduction and the period of loss, the matter was remitted to the same Employment Tribunal.

On remittal, the Tribunal made no Polkey reduction but held that the claimant's employment would have ended within nine months of dismissal. The claimant appealed. The central issue was whether the Tribunal had failed to consider his submission that, if still employed, he would have resigned and claimed constructive dismissal, with consequences for compensation.

1. Appeal allowed in part and remitted to the same Employment Tribunal. The Tribunal failed to deal with the claimant's argued submission that he would have resigned and claimed constructive dismissal. That issue could affect the period for which compensation was payable.

2. The applicable standard for reasons required an outline of the relevant background, findings of fact and reasons sufficient to enable the parties to understand why they had won or lost and to permit appellate review. The Tribunal's reasons contained no reference to constructive dismissal or to the application of that principle to the facts. Its consideration of three other possibilities did not answer the issue.

3. The omission meant that the reasons did not explain why the constructive-dismissal submission had been rejected. The Tribunal therefore erred in law. The case was remitted to the same Tribunal for reconsideration.

4. The irrationality ground failed. The error was not a conclusion that no reasonable tribunal could have reached, but an omission to address a material issue. The perversity ground also failed. The high threshold described in Yeboah v Crofton, [2002] IRLR 634, was not met.

• Employment Appeal Tribunal: Allowed the appeal on the reasons issue, dismissed the irrationality and perversity grounds, and remitted the case to the same Employment Tribunal.
• Hull Employment Tribunal: At the remitted remedies hearing on 27 September 2011, made no Polkey reduction but found that employment would have ceased within nine months of dismissal.
• Employment Appeal Tribunal: In an earlier appeal, allowed the claimant's challenge to the 35% Polkey deduction and limitation of the loss period, and remitted those matters to the same Tribunal.
• Hull Employment Tribunal: Initially found the claimant unfairly dismissed. At the remedies and review hearing, it applied a 35% Polkey reduction and limited employment to a further nine months.