Kerry Ingredients (UK) Ltd v Little

In assessing compensation for unfair dismissal, an Employment Tribunal must make a reasoned assessment of the employment that would probably have continued had the employer acted fairly and lawfully. The exercise permits informed speculation, but the Tribunal must consider all material and reliable evidence and explain its conclusions sufficiently.

Where disability affects the employee’s hours or working pattern, the assessment must address the employer’s obligations under the Equality Act 2010, including reasonable adjustments. Those findings must inform both the amount and period of loss and any Polkey reduction. The EAT will rarely interfere, but must do so where the reasoning does not disclose a proper structured approach.

The Claimant, a maintenance engineer who had suffered a serious heart attack, was dismissed after returning on reduced hours. The Employment Tribunal upheld claims for unfair dismissal and disability discrimination, including a failure to make reasonable adjustments.

On remedy, the Tribunal assessed past and future pecuniary loss using 70% of net pay, awarded future loss for 39 weeks, and made a 20% Polkey deduction. The employer appealed the compensatory award only. It contended that the Tribunal had not addressed evidence about the Claimant’s productive work, the availability of work, or the effect of his inability to return to full-time shift work.

The central issue was whether the Tribunal had given adequate, evidence-based reasons for its assessment of loss and the prospect of a fair dismissal.

1. Appeal allowed. The Employment Tribunal’s pecuniary-loss award could not stand. The matter was remitted, so far as practicable, to the same Tribunal for a fresh determination of pecuniary remedy.

2. An Employment Tribunal assesses unfair-dismissal loss using common sense, experience and justice. The task commonly involves uncertainty and legitimate speculation. It must nevertheless consider all material evidence and make findings which enable the parties to understand why it assessed loss as it did. The EAT will intervene where the Tribunal adopted an erroneous approach or gave reasons which were not Meek-compliant.

3. The Tribunal was entitled to infer that the Claimant might have increased his hours from his earlier phased return. Its assessment that he would work at 70% was therefore not necessarily perverse. However, it did not explain whether it rejected, or how it took into account, the employer’s evidence that he was productive for only 20% of his working time and that his remaining work required agency cover.

4. The finding that the Claimant could not return to full-time shift work was integral to both the level and duration of loss and to the 20% Polkey deduction. The Tribunal had to identify the work, hours and basis on which he would have remained employed had the employer acted fairly and lawfully.

5. That assessment had to take account of obligations under the Equality Act 2010, including reasonable adjustments and the disadvantage caused by full-time shift working. The employer was not obliged to create a job, but the Tribunal had to state what adjustments or working arrangement would have affected continued employment. Its reasons did not disclose those findings or an evidential basis for the 70% figure, the 39-week future-loss period, or the Polkey percentage.

• Employment Appeal Tribunal: allowed the employer’s appeal against the pecuniary-loss remedy and remitted that issue to the same Employment Tribunal.
• Employment Tribunal, Newcastle-upon-Tyne: by a judgment sent on 30 April 2013, upheld claims for unfair dismissal and disability discrimination and made a compensatory award. Liability was not appealed.