Carter v Aulds Bakeries Ltd

A finding that an employee’s conduct caused an unfair dismissal does not by itself justify reducing both statutory awards by 100%. The tribunal must assess, in the circumstances as a whole, whether a reduction is just and equitable, determine the appropriate percentage for each award, and give adequate reasons.

A tribunal may refuse reinstatement where it would not be just to order it under Employment Rights Act 1996, section 116. It must nevertheless explain the matters supporting that conclusion. Speculation about practicability, where that issue was not advanced, cannot supply the necessary reasoning.

The claimant was dismissed after being absent while serving a prison sentence. The Employment Tribunal held that both the original dismissal and the internal appeal were unfair. It refused reinstatement or re-engagement and reduced the basic and compensatory awards by 100% for contributory conduct.

On appeal, the claimant challenged the adequacy of the Tribunal’s reasons for refusing reinstatement and for making total deductions. The central issue was whether the Tribunal had explained why the claimant’s conduct made reinstatement unjust and made a 100% reduction of each award just and equitable.

1. Appeal allowed. The Employment Tribunal’s remedy decision could not stand and was remitted to the same Tribunal for reconsideration.
2. The Tribunal was entitled to regard the claimant’s offending and consequent imprisonment as conduct capable of causing or contributing to dismissal. That finding did not end the inquiry. Having found that the dismissal process, including the appeal, was unfair, the Tribunal had to examine whether deficiencies in that process affected the causal analysis and the just and equitable reduction of compensation.
3. A total deduction is unusual. The Tribunal had to explain why it was just and equitable to reduce both the basic and compensatory awards to nil. Its reasons did not show that it had considered the evidence that the claimant’s partner had informed management of the imprisonment, or the uncertainty concerning holiday pay, when assessing the Appeal Committee’s decision. Nor did they explain why the differing statutory bases for reduction led to the same 100% result.
4. The refusal of reinstatement also lacked sufficient reasons. The Tribunal could decide under section 116(1)(c) of the Employment Rights Act 1996 that reinstatement would not be just because of contributory conduct. However, it had to identify the considerations supporting that conclusion. Its observations on practicability were obiter because the respondents had not submitted that reinstatement was impracticable.
5. The same Tribunal was directed to reconsider reinstatement, including any sum under section 114(2)(a), and whether an order would be just under section 116(1)(c). If no reinstatement order is made, it must reconsider any just and equitable reductions under sections 122 and 123 and give full reasons.

• Employment Appeal Tribunal: Allowed the claimant’s appeal and remitted the remedy issues to the same Employment Tribunal.
• Employment Tribunal, Glasgow: Held the dismissal unfair, refused reinstatement and re-engagement, and reduced the basic and compensatory awards by 100% for contributory conduct. Written reasons were sent on 23 April 2015.