JT Edwards Ltd v Isaac Seopane

Where an employer presents a dismissal as redundancy but the tribunal finds that its real reasons concern the employee’s alleged conduct or performance, the Acas Code may apply. The employer cannot avoid the Code by attaching a redundancy label to a different reason for dismissal.

An uplift requires the tribunal to decide whether the Code applied, whether there was unreasonable non-compliance, and whether an increase is just and equitable. A maximum uplift may be justified where no procedure was followed.

Remedy reasons must also identify the basis of the compensatory calculation. Material uncertainty about the applicable pay rate, capacity to work, or a benefit-in-kind award prevents the parties from knowing why the award was made and may require remittal.

The claimant was employed by the respondent business until his dismissal during the first Covid lockdown. He had sought furlough because of health concerns. The Employment Tribunal found that the asserted redundancy was a disguise for the real reasons for dismissal, which included the employer’s views about his furlough request, overtime and work performance.

The Tribunal upheld claims for unfair dismissal and unlawful deductions from wages, dismissed a race-discrimination claim, and awarded compensation. It applied a 25% Acas uplift. The employer appealed only on remedy, challenging future loss, the uplift, the pay rate used for compensation, grossing-up of wage deductions, and an award for loss of a company car.

The central issue was whether the Tribunal had given adequate and legally sufficient reasons for those remedy awards.

1. Appeal allowed in part. The Tribunal’s conclusion that the dismissal was substantively unfair stood. Its finding was that redundancy was not the real reason. The real reasons were properly characterised as the employer’s view of conduct and performance which it regarded as culpable.

2. The Tribunal was entitled to hold that the Acas Code applied. An employer cannot sidestep the Code by presenting a dismissal arising from alleged misconduct or poor performance as redundancy. Read as a whole, the reasons showed that the Tribunal had considered the Code’s application, the absence of any process, and whether a 25% uplift was just and equitable. The maximum uplift to the compensatory award was therefore upheld.

3. The reasons did not, however, adequately explain whether future loss was calculated at full salary or at the furlough rate. They also made no clear finding whether the claimant’s eczema arose after dismissal as a stress reaction, or how it affected his ability to work and compensation. Those deficiencies could not be cured by attempting to infer conclusions from unclear reasons.

4. The Tribunal did not err on mitigation. It recognised that the employer bore the burden of proving a failure to mitigate and had not established one.

5. Loss of a company car was capable of being a legitimate head of compensatory loss under Employment Rights Act 1996. But the Tribunal erred by raising and determining that issue only after submissions had closed, without giving the employer an opportunity to make submissions or adduce evidence. It also failed to explain the amount awarded.

6. The remedy issues were remitted to a freshly constituted Tribunal: whether the uplift extended to unlawful-deduction compensation; the correct pay basis; the eczema and its effect; and any award for the car. The parties agreed that the unlawful-deduction figures should not have been grossed up.

• Employment Appeal Tribunal: Appeal against the Employment Tribunal’s remedy decision allowed in part. The findings of unfair dismissal and the 25% Acas uplift to the compensatory award were upheld, but specified remedy issues were remitted to a differently constituted tribunal.
• Employment Tribunal: Upheld claims for unfair dismissal and unlawful deductions from wages, dismissed the race-discrimination claim, and made remedy awards including a 25% Acas uplift.