Acetrip Ltd v Dogra (Unfair Dismissal)

Compensation for unfair dismissal must reflect loss caused by the dismissal itself. Where an employee’s illness began before dismissal, the tribunal must assess whether, and to what extent, dismissal exacerbated or prolonged it.

A Polkey assessment requires evaluation of percentage chances, not findings on the balance of probabilities. A proposed counterfactual dismissal must be fair and lawful. Significant future loss also requires consideration of real-world contingencies, mitigation, and procedural fairness to the employer.

When fixing an ACAS uplift under Trade Union and Labour Relations (Consolidation) Act 1992, a tribunal must consider the absolute value of a substantial proposed uplift as well as the seriousness of the breach.

The claimant, an Indian national employed under a Tier 2 visa, was found by the Employment Tribunal to have been automatically unfairly dismissed after making protected disclosures and asserting wage rights. The Tribunal made a substantial compensatory award, including past and future earnings to the end of the original visa period and a 25% ACAS uplift.

The employer appealed the remedy decision. It challenged the approach to illness-related loss, Polkey contingencies, mitigation, future loss, notice pay, tax and the ACAS uplift. The central question was whether the award represented loss attributable to the dismissal and had been calculated by legally correct and fair methods.

1. Appeal allowed. The remedy award was set aside and remitted to the same Employment Tribunal panel, if available, for reconsideration on defined issues.
2. Under section 123(1) of the Employment Rights Act 1996, compensation is confined to loss sustained in consequence of dismissal and attributable to the employer’s action. The claimant’s depression began before dismissal. The Tribunal had to determine, as best it could, whether and to what extent dismissal exacerbated or prolonged that illness. It erred by awarding full earnings for the post-dismissal sickness period without making that causal assessment.
3. A Polkey exercise may require consideration of any realistic counterfactual, not merely procedural-dismissal scenarios. It must be conducted by assessing chances, rather than by deciding what would probably have occurred. The Tribunal therefore erred in deciding on the balance of probabilities that the claimant would not have returned to India before the visa expired. It also had to consider the realistic chance of a lawful capability dismissal for prolonged sickness absence. The employer’s responsibility for causing the illness was material, but did not necessarily preclude a fair dismissal forever. A hypothetical dismissal must be fair and otherwise lawful.
4. The Tribunal adequately addressed why the claimant did not obtain a new Tier 2 sponsor. It did not, however, sufficiently explain why remaining unable to work in the United Kingdom solely to pursue litigation made it reasonable not to return to India, where he could work. It also failed to address the distinct future contingency that he might in fact return to India and obtain work before the visa’s expiry.
5. The employer had not been fairly warned that the Tribunal might award more than two years’ future loss when the schedule claimed only 12 weeks. The Tribunal could award more than the pleaded schedule, but had to give the employer a fair opportunity to address that possibility. It also double-counted the notice week and failed to account for the likely tax-free first £30,000 of compensation.
6. The full ACAS uplift was not impugned in principle. However, an uplift exceeding £20,000 required consideration of its absolute financial value when deciding what was just and equitable under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992. The Tribunal’s failure to do so was an error of law.
7. Fresh evidence was permitted only on the prospect of the claimant returning to work in India before August 2020. The remitted hearing could not reopen an unpleaded sponsor-licence contingency or the entitlement to an ACAS uplift in principle.

• Employment Appeal Tribunal: allowed the employer’s appeal from the remedy decision and remitted specified remedy issues to the same Employment Tribunal panel, if available: [2019] UKEAT 0238_18_1803.
• Employment Tribunal: found automatic unfair dismissal and made a remedy award of £124,658.82. The remedy decision was sent to the parties on 11 June 2018.