N Notaro Homes Ltd v C Keirle & Ors

Under Employment Rights Act 1996, section 123(6), a finding that an employee’s culpable or blameworthy conduct caused or contributed to dismissal requires the tribunal to consider a reduction in the compensatory award. It does not invariably require a positive or nominal reduction.

The tribunal must make a qualitative assessment of what is just and equitable, having regard to the nature of the employee’s causal contribution. A reduction will ordinarily follow, but an exceptional case may justify none. This may include a case in which the conduct merely gave the employer a pretext for a dismissal whose true reason was protected disclosures.

Four employees succeeded in claims for automatic unfair dismissal after their employer purported to dismiss them for social-media posts. The Employment Tribunal found that the posts were a pretext and that protected disclosures were the true reason for dismissal.

At the remedy stage, the tribunal found that each employee had made a culpable or blameworthy post which contributed to dismissal. It nevertheless concluded that no reduction of either the compensatory or basic award was just and equitable. The employer appealed against the refusal to reduce the compensatory awards under section 123(6) of the Employment Rights Act 1996.

The central issue was whether a finding of contributory conduct under section 123(6) necessarily requires some reduction in compensation.

1. Appeal dismissed. Section 123(6) of the Employment Rights Act 1996 requires a tribunal which finds culpable or blameworthy conduct causally contributing to dismissal to consider a reduction in the compensatory award. The word “shall” imposes that duty of consideration.

2. The provision does not, however, require a reduction in every case. The tribunal must determine such proportion as is just and equitable having regard to its causation finding. It may lawfully conclude that no reduction is just and equitable.

3. The assessment is qualitative, although its outcome is expressed as a percentage. The tribunal may consider the nature of the employee’s contribution and how it came about. Usually, contributory culpable conduct will lead to some reduction, as observed in British Gas Trading Ltd v Price UKEAT/0326/15. A conclusion that no reduction is appropriate will be atypical.

4. The tribunal was entitled to reach that conclusion here. The employees’ posts were not a reason, principal or contributing, for their dismissals. They supplied only the pretext which the employer used to dismiss them for making protected disclosures. The tribunal had therefore properly treated the cases as exceptional and given adequate reasons for declining to reduce the compensatory awards.

5. Optikinetics Ltd v Whooley [1999] ICR 984 was not binding on the contrary proposition. Its conclusion that a reduction was mandatory rested on a mistaken reading of earlier authority. The relevant statement in Warrilow v Robert Walker Ltd [1984] IRLR 304 was obiter.

• Employment Appeal Tribunal: The employer’s appeal against the refusal to reduce the compensatory awards was dismissed.
• Employment Tribunal, Bristol: Four employees succeeded in automatic unfair-dismissal claims. At the remedy hearing, the tribunal found contributory culpable conduct but made no reduction under sections 123(6) or 122(2) of the Employment Rights Act 1996.