N Brown v Castlerock Group Ltd

The Employment Appeal Tribunal dismissed the claimant's appeal against an Employment Tribunal decision which found unfair dismissal but set compensation at nil. The key legal principles concerned the application of Polkey (assessing whether a fair procedure would inevitably have led to dismissal) and the operation of section 123(6) of the Employment Rights Act 1996 (reduction of compensatory award for contributory conduct). The tribunal had found serious evidence that the claimant had withdrawn £800 from a vulnerable service user's account without lawful authorisation, amounting to gross misconduct, but had also identified procedural defects (notably failing to adjourn the disciplinary hearing so the claimant could be properly represented). The EAT upheld the Employment Tribunal's conclusion that, despite procedural unfairness, dismissal would have been inevitable on the evidence and that a 100% reduction under both Polkey and section 123(6) was justifiable; the wrongful dismissal claim also failed for the same reason.

This appeal concerned an unfair dismissal claim arising from allegations that the claimant, a field care worker, had made unauthorised ATM withdrawals from a vulnerable client LS's HSBC account in March 2018. The claimant admitted the withdrawals in interviews but said she had been authorised and had given the money to the client. The respondent investigated, disciplinary proceedings were convened and rearranged, the claimant failed to attend with an appropriate representative, and the respondent dismissed her for gross misconduct by letter dated 12 December 2018. The claimant issued Employment Tribunal proceedings for unfair dismissal and wrongful dismissal.

The Employment Tribunal (Employment Judge Nicolle) found that dismissal was substantively justified on the evidence of unauthorised withdrawals and surrounding circumstances but that the dismissal was procedurally unfair because of a number of failings (inadequate investigation, delay, investigator acting as decision-maker and in particular failure to grant an adjournment so the claimant could attend with chosen representation). Despite finding unfair dismissal, the tribunal reduced compensation to nil: firstly by applying Polkey (concluding it was inevitable a fair process would have led to dismissal) and secondly by applying section 123(6) ERA 1996 (finding contributory conduct meriting a 100% reduction). The tribunal also dismissed the wrongful dismissal claim on the basis of gross misconduct.

On appeal to the EAT the claimant challenged (i) the 100% Polkey reduction as unsupported by the evidence and (ii) the 100% section 123(6) reduction and (iii) findings as to wrongful dismissal. The EAT (His Honour Judge Shanks) held that although a 100% Polkey reduction is unusual it is permissible where dismissal would have been inevitable; the tribunal was entitled to find the evidence (withdrawals, HSBC reimbursement, lack of other evidence of spending, inconsistencies in the claimant's account and credibility concerns) overwhelmingly pointed to theft and that dismissal would have followed. Any potential mitigation (length of service, personal circumstances) would not have altered that outcome. Given that conclusion, any arguable imperfections in the tribunal’s treatment of section 123(6) were immaterial; the tribunal’s overall finding that the claimant’s conduct caused or contributed to dismissal supported the zero award and the dismissal of the wrongful dismissal claim. The appeal was dismissed.

Appeal dismissed. The EAT held that although procedural failures rendered the dismissal unfair, the Employment Tribunal was entitled to conclude that the evidence of unauthorised withdrawals was overwhelming and that dismissal would inevitably have followed; accordingly a 100% Polkey reduction and a 100% reduction under section 123(6) ERA 1996 were justified and the wrongful dismissal claim failed.

Employment Tribunal judgment by Employment Judge Nicolle sent out 17 January 2020 after a four-day hearing (claim for unfair dismissal and wrongful dismissal). HHJ Auerbach granted permission for appeal to proceed on three grounds and made an order on 29 September 2020 after a Rule 3(10) hearing. The matter was determined by the Employment Appeal Tribunal, [2022] EAT 5, dismissing the appellant's appeal.