Drive Assist UK Ltd v Alderson

In assessing compensation for unfair dismissal, a tribunal may reduce the award for the chance that dismissal would have occurred despite a fair procedure. It must make a practical estimate on the material and reliable evidence available. It must not use an arithmetical probability based solely on the size of the redundancy pool where evidence specific to the employee’s position is available.

The tribunal need not conduct a detailed re-scoring exercise. It must allow for uncertainty, consider procedural as well as scoring defects, and recognise that the employer bears the burden of proving the existence and extent of the chance. An appellate tribunal need not remit a compensation assessment where, despite an error of law in the reasoning, the result is plainly and unarguably of the correct order.

The employer selected six of 21 drivers for redundancy using a detailed scoring matrix. The claimant was placed sixteenth and was dismissed. The Employment Tribunal held the dismissal unfair because the employer had applied aspects of the criteria inconsistently and had denied the claimant material information and a proper opportunity to respond during the appeal.

The Employment Tribunal nevertheless made a 29% Polkey reduction, reasoning only that six of 21 drivers would have been dismissed in a fair redundancy process. The employer appealed the reduction, contending that the Tribunal should have assessed the evidence concerning the claimant’s score and position in the pool and should have made a 50% reduction. The central issue was the lawful method of estimating the chance of dismissal in any event.

1. Appeal dismissed. The Employment Tribunal erred in law by fixing the Polkey reduction solely by reference to the fact that six of 21 drivers were to be dismissed. That approach failed to consider material evidence particular to the claimant’s position.

2. Under section 123(1) of the Employment Rights Act 1996, compensation must be just and equitable. Where fair procedure might still have resulted in dismissal, the tribunal may estimate that chance and reduce compensation accordingly. The assessment is not all-or-nothing. Following the approach explained in [2007] ICR 825, it must consider all material and reliable evidence, while recognising that uncertainty is inherent in reconstructing a hypothetical fair process.

3. The evidence required consideration included the claimant’s proximity to the redundancy cut-off, the accepted addition of two marks to his score, the possibility that fair consultation and disclosure could have enabled further effective representations, and the scores of employees immediately above him. The employer bore the burden of establishing both the existence and extent of the chance that he would have been dismissed in any event.

4. The tribunal was not required to undertake a detailed re-scoring exercise. Such an exercise would itself have been erroneous. Its task was an evaluative estimate, making proper allowance for evidential deficiencies and imponderables.

5. The employer’s proposed 50% reduction overlooked the procedural defects and the group of employees close to the claimant’s score. Although the Employment Tribunal reached its estimate by an incorrect route, 29% was plainly and unarguably of the correct order. In those circumstances, the Appeal Tribunal would not remit the compensation issue for a further hearing. The appeal was therefore dismissed.

• Employment Appeal Tribunal: Dismissed the employer’s appeal. It held that the Employment Tribunal had erred in its reasoning on the Polkey reduction, but upheld the 29% reduction because it was plainly and unarguably of the correct order.
• Employment Tribunal, North Shields: By judgment dated 5 January 2012, held that the claimant had been unfairly dismissed and reduced his compensatory award by 29% under the Polkey principle.