Mansfield v Taran Microsystems Ltd

When assessing remedy for unfair dismissal, an Employment Tribunal must apply separately the statutory regimes for the basic and compensatory awards. Under section 122(2), it must identify the claimant’s pre-dismissal conduct, decide whether reduction is just and equitable, and explain the extent of any reduction. Under section 123(1), it must assess loss caused by dismissal, its attribution to the employer’s action, and all relevant circumstances. A nil award may be open on the facts, including where serious misconduct is discovered after dismissal, but it requires a reasoned application of those distinct statutory questions. A tribunal errs in law if it moves directly from findings of misconduct to a nil award without adequate reasons.

The Claimant had succeeded in a constructive unfair dismissal claim after the Respondent withheld bonus payments. At a subsequent remedy hearing, the Employment Tribunal found that he had been complicit in a colleague’s removal of confidential company information while they prepared a competing business. It treated that conduct as gross misconduct and made no basic or compensatory award.

The Claimant appealed. He challenged the finding as perverse and contended that the Tribunal had failed to apply and explain the distinct statutory tests governing reductions of the basic and compensatory awards under the Employment Rights Act 1996.

1. Appeal allowed in part. The challenge to the Employment Judge’s factual finding of misconduct was dismissed. The Judge had considered the competing evidence, accepted the Respondent’s evidence as to confidentiality, rejected the Claimant’s asserted corrective conversation with his colleague, and was entitled to infer complicity. Although describing the conduct as “theft” was open to criticism, it did not make the finding perverse.

2. The appeal concerning remedy succeeded. The Employment Judge was entitled in principle to conclude that serious pre-dismissal misconduct, discovered only after dismissal, could justify a substantial or even nil award. However, the Reasons did not show a proper application of the relevant statutory provisions.

3. For a basic award, section 122(2) of the Employment Rights Act 1996 required the Tribunal to identify the claimant’s conduct, decide whether reduction was just and equitable, and explain the extent of any reduction.

4. For a compensatory award, section 123(1) required separate consideration of the loss sustained in consequence of dismissal, whether it was attributable to the employer’s action, and what was just and equitable in all the circumstances. Relevant matters could include the constructive dismissal, the claimant’s conduct, the prospect of dismissal had the misconduct been known, and the means by which the misconduct evidence was obtained.

5. The Judge instead appeared to move from findings of misconduct directly to a nil award. His recital of section 123(6), which was inapplicable, and the absence of an adequate explanation created doubt whether all relevant circumstances had been analysed. The remedy decision was therefore erroneous in law. By agreement, the remedy issues were remitted to the same Employment Judge.

• Employment Appeal Tribunal: Allowed the appeal against the remedy decision in part and remitted remedy to the same Employment Judge. The perversity challenge was dismissed.

• Employment Tribunal, Southampton: Found that the Claimant had been constructively and unfairly dismissed. At the remedy hearing, it reduced both the basic and compensatory awards to nil. The liability judgment was sent to the parties on 1 June 2017 and the remedy judgment on 16 August 2017.