Williams v Amey Services Ltd

In assessing a Polkey reduction under section 123(1) of the Employment Rights Act 1996, an Employment Tribunal must assess what this employer would probably have done had it followed a fair process at the point when the unfairness arose. The exercise is fact-specific and does not impose a single starting date or a reasonable-employer test.

A contributory-fault reduction may reflect culpable conduct that is bloody-minded or unreasonable, including blameworthy manifestations of personality. It cannot be 100% where the employee was not the sole cause of dismissal. In reducing a basic award under section 122(2), the employer's unfair conduct is irrelevant.

The Employment Tribunal held that the Claimant had been unfairly dismissed after the Respondent had predetermined dismissal following a breakdown in working relationships. It made a 90% Polkey reduction to the compensatory award and a further 100% reduction for contributory fault. It made no reduction to the basic award.

The Claimant appealed the Polkey and contributory-fault reductions. The Respondent conceded that a 100% contributory reduction could not stand, and cross-appealed the refusal to reduce the basic award. The central issues were the proper Polkey inquiry, the scope and amount of contributory fault, and whether employer conduct could be considered when reducing the basic award.

1. Appeal and cross-appeal allowed. The Tribunal's 90% Polkey reduction could not stand because its Reasons did not disclose whether it had asked the required question: what would probably have occurred had this employer done what it ought to have done under a fair process.

   The assessment under section 123(1) of the Employment Rights Act 1996 is broad and fact-specific. It concerns this employer in the actual circumstances, not a hypothetical reasonable employer. There is no single mandatory method, nor must the assessment always begin at the effective date of termination. Where unfairness may have arisen at different stages, the Tribunal must identify the relevant point and project forward from the corrective fair process.

2. The Tribunal was entitled to find some contributory fault. Culpable or blameworthy conduct can include behaviour that is bloody-minded or unreasonable in all the circumstances. It may include the blameworthy manifestation of an employee's personality in workplace conduct. The Tribunal's findings adequately supported a reduction.

   However, a 100% reduction under section 123(6) was impermissible because the Tribunal had found the Claimant to be the principal, rather than sole, cause of the relationship breakdown. The appropriate percentage was for the Tribunal.

3. The Tribunal erred in refusing to reduce the basic award after taking account of the Respondent's unfair procedure. Under section 122(2), the relevant conduct is that of the employee before dismissal; the employer's conduct is not relevant. Its reasoning was also undermined by the erroneous 100% reduction to the compensatory award.

4. The Polkey issue, the level of contributory reduction and the basic-award reduction were remitted to the same Employment Judge for fresh consideration on the existing findings of fact.

• Employment Appeal Tribunal: allowed the Claimant's appeal on the Polkey issue and the impermissible 100% contributory-fault reduction, and allowed the Respondent's cross-appeal concerning the basic award. Remedy issues were remitted to the same Employment Tribunal.
• Employment Tribunal: held the dismissal unfair; reduced the compensatory award by 90% under section 123(1) and then 100% under section 123(6) of the Employment Rights Act 1996; made no reduction to the basic award.