N Brown v Castlerock Group Ltd

A Polkey assessment reconstructs the likely result of a fair procedure. A tribunal may reduce compensation by 100% where it is entitled to find that dismissal following a fair process was inevitable. Such a conclusion is unusual but permissible. Gross misconduct does not automatically make dismissal inevitable; relevant mitigation must be considered.

An error in an alternative reduction for contributory conduct does not affect the result where a valid 100% Polkey reduction already leaves no compensatory award. For wrongful dismissal, the tribunal must decide for itself whether gross misconduct occurred. A contractual procedural failure causes no notice-pay loss where gross misconduct entitled the employer to dismiss summarily.

The claimant, a field care supervisor, was dismissed following allegations that she made unauthorised withdrawals totalling £800 from a vulnerable service user’s bank account. The Employment Tribunal found the dismissal procedurally unfair, principally because the claimant should have been allowed an adjournment and an opportunity to put her case.

It nevertheless found that there were reasonable grounds to regard the theft allegation as proved, that dismissal was a fair sanction, and that a fair process would inevitably have resulted in dismissal. It therefore reduced compensation to nil under Polkey and made reductions under sections 122(2) and 123(6) of the Employment Rights Act 1996. It also dismissed the wrongful-dismissal claim.

The claimant appealed the 100% Polkey reduction, the section 123(6) reduction, and the dismissal of her wrongful-dismissal claim.

1. Appeal dismissed. The Employment Judge was entitled to conclude that, had a fair procedure been followed, the claimant would inevitably have been dismissed for theft. The evidence was overwhelming if unanswered. The Tribunal had heard the claimant’s evidence and was entitled to reject her account that the withdrawals were authorised and that she gave the money to the service user.

2. A Polkey assessment concerns the loss flowing from unfair dismissal. It is a practical assessment of the chance of what would have occurred under a fair procedure, using common sense, experience and justice. The appellate tribunal should interfere only where the assessment is perverse or wholly unsupported by evidence. A 100% reduction is unusual, but is available where fair dismissal was inevitable.

3. The EAT accepted that a finding of gross misconduct does not itself compel the conclusion that dismissal was inevitable: mitigation may matter. Here, however, the claimant denied the theft and had no viable mitigation concerning it. Her length of service, clean record, family circumstances and likely loss of profession could not have altered the inevitable outcome. The Tribunal’s separate finding that dismissal was a fair sanction reinforced that conclusion.

4. The Employment Judge’s reasoning on section 123(6) was arguably unclear because it referred to conduct and responses which might not have caused the dismissal, including matters after dismissal. Any such error was immaterial. The valid 100% Polkey reduction independently reduced the compensatory award to nil.

5. The wrongful-dismissal claim also failed. The Tribunal had to decide for itself, on the balance of probabilities, whether the claimant committed gross misconduct. Its findings and credibility assessment supported the conclusion that she had stolen the money. Even if the employer’s procedures were contractual, the theft entitled it to dismiss summarily, so no notice-pay loss resulted from any procedural breach.

• Employment Appeal Tribunal: dismissed the claimant’s appeal and upheld the Employment Tribunal’s nil compensatory award and dismissal of the wrongful-dismissal claim.
• Employment Tribunal: upheld the unfair-dismissal claim on procedural grounds, but reduced compensation to nil under Polkey and section 123(6) of the Employment Rights Act 1996; it dismissed the wrongful-dismissal claim.