N Notaro Homes Ltd v C Keirle & Ors

The Employment Appeal Tribunal considered whether a tribunal, having found that an employee's culpable or blameworthy conduct caused or contributed to dismissal, is obliged in law to reduce the compensatory award by some positive proportion under section 123(6) Employment Rights Act 1996. The tribunal below had found that four claimants were dismissed for making protected disclosures, that social media posts had been a pretext and that each claimant had engaged in culpable conduct which contributed to the dismissal, but it exercised its discretion not to reduce the compensatory awards.

The EAT held that, although in most cases a finding of contributory conduct will lead to some reduction, it is not the law that a tribunal must always impose a positive reduction; the statutory duty is to consider and then determine "such proportion as it considers just and equitable having regard to that finding" and that may, in an unusual case, be none. The EAT dismissed the employer's appeal against the tribunal's decision not to reduce the compensatory awards on the facts of this case.

This appeal arises from unfair dismissal proceedings in which four employees succeeded at tribunal in finding that their dismissals were for making protected disclosures. The employer had relied on breaches of a social media policy as the stated reason for dismissal; the tribunal found that the social media allegations were a pretext and that protected disclosures were the true reason for dismissal.

The tribunal also found, however, that each successful claimant had made social media posts that amounted to culpable or blameworthy conduct which contributed to their dismissals. At remedy the tribunal concluded that it would not be just and equitable to reduce either the compensatory or basic awards under ss.123(6) and 122(2) Employment Rights Act 1996, despite those findings of contributory conduct.

The respondent employer appealed on the single permitted ground that, having found contributory conduct causative of dismissal, the tribunal was required as a matter of law to reduce the compensatory award by some positive proportion. The EAT reviewed the statutory history and a number of authorities (including Optikinetics v Whooley, Warrilow v Robert Walker, Parker Foundry v Slack and British Gas Trading v Price) and analysed whether earlier decisions established a legal rule that a reduction must always follow.

The EAT concluded that prior authorities do not establish an invariable rule that some positive reduction must always be made. The word "shall" in s.123(6) requires the tribunal to consider reduction, but the phrase "such proportion as it considers just and equitable having regard to that finding" leaves open that, in atypical circumstances, the tribunal may conclude that no reduction is just and equitable. The EAT emphasised that reductions are usually expected where blameworthy conduct contributed to dismissal, but that the present facts—where the conduct provided only a pretext and the protected disclosures were the true reason—were an example of an atypical case in which no reduction was permissible. The appeal was dismissed.

Appeal dismissed. The EAT held that while a finding that an employee's culpable conduct caused or contributed to dismissal will ordinarily lead a tribunal to reduce the compensatory award under section 123(6) ERA 1996, it is not a legal requirement that a reduction must always be made. The tribunal was entitled in the particular facts, where the social media posts were a pretext and the protected disclosures were the true reason for dismissal, to conclude that it was not just and equitable to reduce the compensatory awards at all.

Appeal to the Employment Appeal Tribunal from Employment Tribunal decisions on liability and remedy (remedy decision and findings by Employment Judge Midgley at Bristol). Permission to appeal was given at a rule 3(10) hearing; EAT neutral citation [2024] EAT 122. (No further prior appellate citations given in the judgment.)