Cox v Northern Devon Healthcare NHS Trust

For a reduction for contributory conduct under section 123(6) of the Employment Rights Act 1996, the conduct must be blameworthy and must have caused or contributed to the dismissal. In a constructive-dismissal case, the inquiry is whether blameworthy conduct by the claimant caused or contributed to the employer’s repudiatory breach.

A tribunal must identify the conduct relied on, its timing and why it was blameworthy. It must also explain the causal connection and the percentage reduction. A loss of confidence between an employee and departmental managers is not, without more, a loss of confidence between the employee and a sizeable employer. When assessing compensation, the tribunal must consider any properly advanced case that the employment would later have ended for good reason.

The claimant, a maintenance assistant, made health-and-safety disclosures through the respondent’s whistleblowing procedure. Following his dismissal and subsequent reinstatement, he resigned after being instructed to work in the IT Department rather than the Estates Management Department.

An earlier appeal had remitted the issues of fairness and remedy. On remission, the Employment Tribunal held the constructive dismissal unfair, made no Polkey reduction, but reduced compensation by 80 per cent for contributory conduct. It adopted a schedule of loss without addressing the respondent’s submission that the employment might in due course have ended.

The claimant appealed the contribution deduction. The respondent cross-appealed on the period of loss. The central issues were whether the tribunal had correctly applied section 123(6) of the Employment Rights Act 1996 and whether it had addressed the proposed limit on future loss.

1. Appeal and cross-appeal allowed. The Employment Tribunal’s remedy decision could not stand. The matter was remitted to a freshly constituted tribunal.

2. Section 123(6) of the Employment Rights Act 1996 requires a causal inquiry. The claimant’s conduct must be blameworthy and must have caused or contributed to the dismissal. Where dismissal is constructive, the necessary focus is whether the claimant’s blameworthy conduct caused or contributed to the employer’s fundamental and repudiatory breach. The employer’s repudiatory breach will ordinarily show fault on its part, although the breach may, on the facts, have been caused in part by the claimant’s blameworthy conduct.

3. The tribunal had not identified the conduct said to be incompatible with continued employment, explained its alleged blameworthiness, or addressed when it occurred. Conduct occurring while both parties considered that the employment had ended could require a materially different characterisation.

4. The tribunal also treated a breakdown of confidence between the claimant and departmental management as a total and mutual loss of trust and confidence between the claimant and the employer. That was an error. In a sizeable undertaking, a lack of confidence between employees within a department does not itself establish a loss of confidence in the employer as a whole. The tribunal needed to assess whether any blameworthy conduct made the instruction to work elsewhere reasonable and thereby contributed to the repudiatory breach.

5. The tribunal gave no intelligible reasoning for selecting an 80 per cent deduction. It also failed to determine the respondent’s submission that future loss should be limited because the employment relationship might later have ended for good reason. The fresh tribunal was directed to treat reinstatement and the reason for constructive dismissal as established, reconsider contribution under section 123(6), and consider whether compensation should be limited before any contribution deduction. The previously determined Polkey issue was distinct.

• Employment Appeal Tribunal: this appeal allowed the claimant’s appeal against the 80 per cent contribution deduction and the respondent’s cross-appeal concerning the period of loss. The remedy issues were remitted to a fresh tribunal.
• Employment Appeal Tribunal: an earlier appeal before Wilkie J, reference UKEAT/0341/10, remitted the fairness of the constructive dismissal and remedy issues because the Employment Tribunal’s reasoning was too scanty.
• Employment Tribunal, Exeter: in 2009 it found unfair dismissal and detriment for protected disclosures, but made no dismissal remedy because it considered that there had been a total and mutual loss of trust and confidence. On the remitted hearing, its decision was sent to the parties on 6 June 2011.