East Coast Main Line Company Ltd v Phillips (Practice and Procedure)

In assessing a Polkey reduction, an Employment Tribunal must predict the chances that the actual employer, acting fairly, would have dismissed. It must not decide what a hypothetical fair employer would have done.

Reasons for that assessment must be read as a whole and with the findings on unfair dismissal. The Tribunal need not repeat those earlier findings when addressing compensation. Reasons are sufficient if they disclose why the assessment was made and permit appellate scrutiny. A broad percentage assessment may involve limited further explanation where the underlying findings explain the conclusion.

The Employment Tribunal upheld the claimant's unfair-dismissal claim. It found defects in the employer's appeal process, including reliance on undisclosed customer complaints and an unfair approach to remorse and apology.

It found a 50% chance that, had a fair process been followed, the claimant would still have been dismissed. It also made a 50% reduction for contributory conduct. The employer appealed only on the ground that the Tribunal had given no adequate reasons for its 50% Polkey assessment.

The central issue was whether the Employment Tribunal's reasons, read as a whole, adequately explained that assessment.

1. Appeal dismissed. The Employment Tribunal gave sufficient reasons for its 50% Polkey assessment.

2. A Polkey assessment is predictive. The Tribunal must assess whether the employer could fairly have dismissed and the chances that the actual employer, if it had acted fairly, would have done so. It is not a balance-of-probabilities finding and does not ask what a hypothetical fair employer would have done.

3. Reasons must be read fairly and as a whole. Findings on a Polkey issue will commonly flow from the findings on the underlying unfair dismissal. The Tribunal was not required to reproduce those findings when it reached compensation. Although an express cross-reference would have improved its reasons, the parties and an appellate tribunal could read paragraph 78 in the light of the earlier findings.

4. Those findings explained the 50% conclusion. The Tribunal had found that remorse might have been critical to the appeal decision-maker and that, if properly invited to do so, the claimant would have made a meaningful apology. It also found that fair consideration of prior complaints might have removed an adverse factor. Those matters disclosed a significant prospect that dismissal would not have occurred. The precise broad assessment was principally for the Employment Tribunal.

5. The EAT noted a possible error in the Employment Tribunal's statement that both the basic and compensatory awards would be reduced by 75%. The point was not a ground of appeal and could be addressed when remedy was finalised.

• Employment Appeal Tribunal: dismissed the employer's appeal and upheld the adequacy of the Employment Tribunal's reasons for its 50% Polkey assessment.
• Employment Tribunal, London Central: by judgment dated 9 May 2016, upheld the unfair-dismissal claim, assessed a 50% Polkey reduction, and found 50% contributory conduct.