Wincanton Group Ltd v De Cort & Anor

In assessing compensation for unfair dismissal, an Employment Tribunal must estimate the chance that the actual employer, acting fairly, would have dismissed the employee. It must not decide what the Tribunal itself would have done in a fair selection exercise.

Where there is a real possibility of a fair dismissal, the Tribunal must assess that possibility as a percentage and make an appropriate Polkey reduction under Employment Rights Act 1996. An employer may choose whom to employ in a reorganised structure, subject to fair and cogent criteria. The Tribunal may scrutinise the process, but it may not select the preferred candidate itself.

The claimants had succeeded in claims for unfair dismissal after their selection for redundancy. No appeal was brought against liability. At the subsequent remedy hearing, the Employment Tribunal awarded compensation on the basis that, after a fair selection exercise, Mr De Cort would have obtained the most senior available role and Mr Kemp would have remained employed until a later redundancy.

The employer appealed. It contended that the Tribunal had substituted its own assessment of scoring, interview performance and appointments for the assessment the employer would fairly have made. It also contended that the Tribunal had not properly assessed the chance of future fair redundancy when calculating compensation under Employment Rights Act 1996.

The central issue was whether the remedy Tribunal had applied the correct chance-based approach to a Polkey reduction.

1. Appeal allowed and remedy remitted. The Employment Tribunal had applied the wrong approach when assessing compensation. It was required to determine what the actual employer would probably have done had it acted fairly, rather than decide what outcome the Tribunal regarded as correct.

2. Under Employment Rights Act 1996, s 123, and Polkey v A E Dayton Services Ltd [1987] IRLR 503, compensation requires an assessment of the chance that an employee who was unfairly dismissed would nevertheless have been dismissed fairly. The inquiry is not decided on the balance of probabilities. As explained in Hill v Governing Body of Great Tey Primary School [2013] IRLR 274, the Tribunal must assess the conduct of the actual employer on the assumption that it would have acted fairly.

3. The Tribunal was entitled to examine all the evidence and to assess its reliability. It was not entitled, however, to conduct its own scoring exercise, decide that Mr De Cort was the best candidate, or infer from his presentation of the litigation that he would have performed best at interview. In the absence of findings that the exercise was a sham or motivated by an ulterior purpose, the Tribunal could test whether the employer's proposed criteria were cogent and fair, but could not select a different outcome itself.

4. If there was a chance of fair dismissal, including through later redundancy, the Tribunal had to identify that chance and apply a percentage reduction. Its reasons did not clearly show that it had assessed what the employer would have done fairly.

5. The case was remitted to the same Tribunal. There was no issue of bias or impartiality, and the errors did not make a fair reconsideration impossible.

• Employment Appeal Tribunal: Appeal allowed. The remedy decision was remitted to the same Employment Tribunal for reconsideration in accordance with Employment Rights Act 1996, s 123 and the relevant authorities.
• Employment Tribunal, East London: The claimants succeeded in their unfair dismissal claims, with reasons sent on 22 February 2012. At a later remedy hearing, reasons copied to the parties on 16 January 2013, the Tribunal made compensatory awards. No appeal was brought against the liability decision.