No compensation despite unfair dismissal where dismissal was inevitable

Background

When assessing compensation for unfair dismissal, tribunals may reduce an award in two different ways. A Polkey reduction reflects the likelihood that the employee would have been dismissed even if a fair procedure had been followed. A reduction for contributory conduct reflects the extent to which the employee's own culpable or blameworthy conduct caused or contributed to the dismissal.

In Jarosinski v Nestle UK Ltd, the claimant was employed as a Quality Assurance Technician. Over a lengthy period, his relationships with his managers deteriorated significantly despite repeated attempts by the employer to repair them. The claimant made serious allegations about his managers, describing one as a "two-faced snake" and another as a "sociopathic bully", and consistently refused to moderate those views or rebuild the working relationship.

The employer dismissed the claimant for some other substantial reason, namely the fundamental and irretrievable breakdown in working relationships. The Tribunal found that the dismissal was procedurally unfair because the claimant had not been warned that dismissal was being considered or given the opportunity to make representations.

However, it also found that the claimant's conduct was entirely culpable and had directly caused the dismissal. It therefore reduced both the basic and compensatory awards by 100% for contributory conduct and applied a 100% Polkey reduction, concluding that a fair procedure would inevitably have resulted in dismissal.

The claimant appealed.

EAT decision

The EAT dismissed the appeal. It confirmed that a deduction for contributory conduct and a Polkey reduction address different questions and therefore do not amount to impermissible double counting, even where each results in a 100% reduction.

The EAT also held that the Tribunal had been entitled to conclude that a fair procedure would have made no difference. In reaching that conclusion, it was permissible for the Tribunal to take into account the claimant's conduct at the hearing itself, where he maintained the same hostile and unrepentant attitude towards his managers that had led to the breakdown in the employment relationship.

Learning points for employers

Employers should always follow a fair dismissal procedure, including warning employees where dismissal is a possible outcome and giving them an opportunity to make representations. A procedurally unfair dismissal will usually lead to liability, even where there is a strong substantive reason for dismissal.

This decision illustrates that, in exceptional cases, a procedurally unfair dismissal may nevertheless result in no compensation. Whether a tribunal will make substantial reductions for contributory conduct or apply a Polkey reduction will depend on the facts of the particular case, including the employee's conduct and the likelihood that a fair procedure would have produced the same outcome.

The case also underlines the importance of documenting attempts to repair a deteriorating working relationship and retaining evidence of an employee's conduct throughout the employment relationship. Such evidence may prove relevant not only to the fairness of the dismissal itself, but also to any subsequent assessment of contributory fault or a Polkey reduction.

For more information or advice, please get in touch with Lucy Cinnamond in our Employment team.