Venkatesan v Surabi Ltd & Anor (Unfair Dismissal : Polkey deduction)

When assessing compensation for an unfair dismissal caused by procedural unfairness, a tribunal must consider both the likely duration of a fair procedure and the real-world chance that it would have produced a different outcome. It errs if it assumes that no compensatory loss follows solely because a fair procedure could have been completed within the notice period.

Reasons for dismissing a wages-deduction claim must identify the issues, material findings, relevant law and its application. Where no reasoning is given, the decision cannot stand.

The Claimant succeeded before the Nottingham Employment Tribunal in his unfair dismissal claim, but received no compensatory award. The tribunal held that a fair procedure concerning his right to work would have led to dismissal within his one-month notice period. It also dismissed his claim for unauthorised deductions from wages of about £5,400 without giving reasons.

The Claimant appealed on the basis that a fair investigation might have established his continuing right to work, and that the reasons for dismissing the wages claim were deficient. The respondents were debarred from participating in the appeal.

1. Appeal allowed. The compensatory-award issue and the unlawful-deductions claim were remitted to a fresh Employment Tribunal.

2. The Employment Judge was entitled to consider that a fair procedure could have been completed within the notice period. That was not, however, the whole Polkey inquiry. The tribunal also had to assess the percentage or real-world chance that a fair investigation would have produced a different outcome.

3. On the evidence, a proper investigation might have established that the Claimant retained a right to live and work in the United Kingdom while his immigration appeal was pending. The Employment Judge had assumed the contrary without addressing what the employer would probably have discovered from the Claimant’s solicitors or UKBA. That failure to make necessary findings vitiated the conclusion that there was no compensatory loss.

4. The Appeal Tribunal could not substitute its own conclusion. More than one conclusion remained possible, and the respondents had not been heard on the issue. Compensation for the established unfair dismissal was therefore remitted for fresh determination.

5. The dismissal of the unlawful-deductions claim was also unsustainable. The written reasons identified neither the issues nor findings of fact, relevant law, or its application. As the Employment Judge had died, that omission could not be remedied through the Burns/Barke procedure. The claim was remitted to the same fresh tribunal.

• Employment Appeal Tribunal: Appeal allowed. The issues of compensation and unlawful deductions were remitted to a fresh Employment Tribunal.
• Nottingham Employment Tribunal: The unfair dismissal claim succeeded, with a basic award but no compensatory award; the unlawful-deductions claim was dismissed.