J Davidson v National Express Limited

Under section 123(1) of the Employment Rights Act 1996, an assessment of unfair-dismissal compensation must be directed to the loss caused by dismissal. A tribunal cannot select a future-loss cut-off merely because it considers the resulting award broadly just and equitable.

Where future employment prospects are uncertain, the tribunal must nevertheless assess the likely loss as best it can. It must engage with material evidence, including the employee’s intended working period and relevant contingencies. Speculation is not a reason to avoid the exercise.

The claimant, an airside coach driver, was summarily dismissed after three workplace breath tests registered alcohol above the respondent’s permitted threshold. The Employment Tribunal upheld her unfair-dismissal complaint solely because the internal appeal was unfair. It dismissed her wrongful-dismissal complaint.

The Tribunal reduced the compensatory award by 75% under Polkey, reduced both awards by 75% for contributory conduct, and applied a 10% ACAS Code uplift. It calculated loss only to the claimant’s sixty-fifth birthday, although she said she intended to work until 70. The claimant appealed, challenging the Tribunal’s reasons and its future-loss assessment.

1. Appeal allowed in part. The challenges to the adequacy of the Tribunal’s reasons, the 75% Polkey reduction, the 75% contributory-conduct reduction, the ACAS uplift, and the dismissal of the wrongful-dismissal complaint failed. Those parts of the decision remained undisturbed.

2. The Tribunal’s reasons had to be read in their factual and procedural context. Its findings sufficiently explained why it accepted that the claimant had admitted drinking alcohol, why the dismissing manager had retained an open mind, why the positive tests were caused by alcohol, and why the respondent’s alcohol policy could reasonably be applied to an airside passenger-carrying driver.

3. For compensation under section 123(1) of the Employment Rights Act 1996, the Tribunal had to assess, as best it could, the loss caused by dismissal. Future loss and a Polkey assessment both involve uncertainty. That uncertainty does not permit a tribunal to decline to evaluate material evidence: Software 2000 Ltd v Andrews [2007] ICR 825 and Contract Bottling Ltd v Cave [2015] ICR 146.

4. The Tribunal erred by retaining age 65 as the future-loss cut-off without a principled assessment of the claimant’s likely working life. It treated the possible overstatement of loss caused by unknown future earnings increases as an offset for loss after age 65. It also appears to have been influenced by the overall length of the award. Neither consideration rationally assessed the loss attributable to dismissal. The Tribunal did not sufficiently evaluate the claimant’s evidence that she intended to work to 70, or the relevant contingencies which might affect that intention.

5. The calculation of the underlying past and future loss for the compensatory award was remitted to the same Employment Judge if possible. The parties may update evidence of actual earnings, current employment and other matters relevant to the revised assessment.

• Employment Appeal Tribunal: Allowed the appeal only as to the calculation of the compensatory award and remitted that assessment for fresh determination: [2025] EAT 151.
• Employment Tribunal: Upheld unfair dismissal because the internal appeal was unfair, dismissed wrongful dismissal, and made Polkey, contributory-conduct and ACAS Code adjustments. Its reconsideration decision corrected the claimant’s date of birth but retained the age-65 future-loss cut-off.