Soll (Vale) v Jaggers

Where an Employment Tribunal finds that an employee committed gross misconduct which would independently justify summary dismissal, it must give effect to that finding when assessing a Polkey deduction. It cannot refuse a deduction merely because the employer’s original decision-maker had a closed mind, if a fair and impartial process would inevitably have resulted in dismissal.

In assessing contributory fault, the Tribunal must focus on the employee’s blameworthy conduct and the just and equitable reduction. It must not reduce the assessment because of the employer’s unfair conduct, which has already been addressed in deciding liability.

The claimant, a charity’s managing director, was summarily dismissed after disciplinary proceedings. One charge concerned his presentation of a materially falsified contract of employment during termination negotiations, with a view to personal gain. The Employment Tribunal upheld his unfair-dismissal claim because it considered that the disciplinary process had been pre-judged. It nevertheless found that the falsification was gross misconduct, dismissed the wrongful-dismissal claim, made no Polkey deduction, and reduced compensation by 10 per cent for contribution.

The employer appealed. The central questions were whether the Tribunal had adequately explained its finding of procedural unfairness, and whether its approaches to Polkey and contributory fault were legally erroneous or perverse.

1. Appeal allowed. The Tribunal’s reasoning on liability was unclear. It did not make clear whether the unfairness arose from appointing a trustee who had investigated the original charges as decision-maker, or from a supposedly tainted investigation as a whole. That distinction mattered, particularly because the falsified-contract allegation had been independently investigated and because it affected whether an appeal could cure the defect. If liability alone had been in issue, remittal would have been appropriate.

2. The Tribunal erred in refusing a Polkey deduction. Its findings did not establish that the claimant’s falsification of the contract was caused by the employer’s unfair conduct, nor that the evidence was too uncertain to permit a prediction. It had found, as an independent and neutral body, that the claimant deliberately falsified the contract for personal advantage and that this was gross misconduct justifying summary dismissal. A fair process considering that allegation in isolation would therefore have resulted in dismissal.

3. The Tribunal also misdirected itself on contributory fault under Employment Rights Act 1996, sections 122(2) and 123(6). Having found blameworthy conduct which contributed to dismissal, it was required to assess the just and equitable reduction by reference to the claimant’s conduct. It instead allowed the employer’s prior course of conduct to reduce the assessment. A 10 per cent reduction for a senior employee who materially falsified his contract for personal gain was perverse.

4. Because dismissal in any event was the only permissible conclusion on the Tribunal’s findings, the EAT substituted a nil award under Polkey. It was unnecessary to fix the higher percentage reduction for contributory fault.

• Employment Appeal Tribunal: allowed the employer’s appeal and substituted a nil award under Polkey: [2017] UKEAT 0218_16_0802.
• Employment Tribunal, Reading: upheld the unfair-dismissal claim, rejected wrongful dismissal, made no Polkey deduction, and reduced compensation by 10 per cent for contribution.