Lifeline Energy v Miedziolka (Unfair Dismissal : Polkey deduction)

In assessing a Polkey deduction, an Employment Tribunal must make its counterfactual assessment on evidence. An employer seeking a reduction must provide evidence capable of showing that the procedural unfairness would probably have made no difference to dismissal or loss. The Tribunal must not speculate about a hypothetical fair process without an evidential basis.

A short reasons judgment is sufficient where its reasoning and calculation can be understood by the parties and appellate court.

The claimant, Head of Finance and Administration for a small charity, was dismissed for redundancy. The London (Central) Employment Tribunal held the dismissal procedurally unfair because there had been no proper consultation. It awarded compensation for loss up to the remedy hearing and made no Polkey reduction.

The employer appealed against the remedy decision. The permitted issues were whether the Tribunal should have reduced compensation on the basis that a fair consultation would have produced the same dismissal, and whether the Tribunal had given adequate reasons for its award.

1. Appeal dismissed. The Employment Tribunal was entitled to make no Polkey deduction. A counterfactual assessment of what would have occurred had a fair procedure been followed must rest on evidence, not a constructed hypothetical world.
2. A Polkey reduction was an argument advanced by the employer. It therefore had to provide evidence that proper consultation would nevertheless have resulted in the claimant’s dismissal at the same time. The Tribunal found that the evidence was insufficient, and that conclusion disclosed no error of law.
3. The possibility of a part-time bookkeeping role had not been discussed with the claimant before dismissal. Although she later accepted that she would have taken it, other alternatives might also have emerged through a fair consultation. The employer had not supplied evidence allowing the Tribunal reliably to predict the outcome of that process. It was therefore entitled to award compensation without reduction.
4. The Tribunal’s reasons on compensation satisfied the standard in Meek v City of Birmingham District Council [1987] IRLR 250. Although brief, they made clear that the claimant received her demonstrated losses up to the hearing date and that no forward-loss calculation had been made.

The appeal was dismissed in full.

• Employment Appeal Tribunal: Appeal dismissed. The Tribunal upheld the London (Central) Employment Tribunal’s remedy award and its refusal to make a Polkey deduction.
• Employment Tribunal, London (Central): Judgment dated 11 November 2011, with reasons sent on 13 December 2011. The claimant was held to have been unfairly dismissed for procedural unfairness in a redundancy process and was awarded compensatory loss.