Anjum Sarah v Aetos Capital Group (UK) Ltd

Where an employment tribunal assesses compensation by reference to the chance that a claimant would have obtained employment following a fair redundancy procedure, its percentage assessment must be supported by intelligible reasons. A finding that the claimant had at least a 50 per cent chance does not justify a deduction fixed at 50 per cent without explaining why the chance was not higher. The reasons must enable the parties to understand whether the tribunal treated the candidates as having equal prospects or made a different assessment.

The claimant was unfairly dismissed during a purported redundancy exercise in which two existing roles were to be consolidated into one. The Employment Tribunal found the exercise to be a sham. It held that a Mandarin-speaking requirement for the new role was unnecessary and that, under a fair procedure, the claimant had at least a 50 per cent chance of securing the role.

The tribunal calculated compensation and reduced it by exactly 50 per cent. The claimant appealed on the basis that the tribunal had not adequately explained that precise percentage. The central issue was whether the reasons supported the reduction and complied with the requirement explained in [1987] IRLR 250.

1. Appeal allowed to a limited extent. The issue was remitted to the same Employment Tribunal for a fuller assessment of the percentage reduction to the compensatory award.

2. An assessment of the chance of a hypothetical event is necessarily inexact. The tribunal was not required to achieve mathematical certainty. It was nevertheless required to explain the evaluative basis on which it selected its percentage.

3. The tribunal's finding that the claimant had at least a 50 per cent chance of obtaining the combined role meant that 50 per cent was the lowest chance it regarded as appropriate. That language allowed for a greater chance. The tribunal therefore erred in selecting exactly 50 per cent without giving a reasoned basis for treating that figure as the appropriate deduction.

4. The reasons did not reveal whether the tribunal had simply attributed equal chances to the two candidates or had assessed a higher prospect and, if so, why it had not reflected that prospect in compensation. They were consequently not compliant with the requirement in Meek v City of Birmingham District Council [1987] IRLR 250 that the parties can understand the basis of the decision.

5. The same tribunal must make a more detailed evaluation of the appropriate reduction pursuant to the Polkey principle. It may decide whether further evidence or submissions are needed.

• Employment Appeal Tribunal: allowed the appeal to the extent of remitting the percentage assessment for reconsideration, [2022] EAT 187.
• Employment Tribunal: found the claimant unfairly dismissed, assessed compensation, and reduced it by 50 per cent to reflect her chance of securing the combined role in a fair redundancy process.