EAT finds no requirement to reduce compensatory award as a result of employee's contributory fault.
The Employment Appeal Tribunal (EAT) has found that a compensatory award does not necessarily need to be reduced where there is a finding of contributory fault on the part of the employee.
Reductions in compensatory awards
Where a Claimant's behaviour plays a contributing factor in their dismissal, the compensation that they are awarded is usually reduced. However, a recent judgement from the EAT has clarified that this is not a legal requirement.
The facts
In Notaro Homes Ltd v Keirle and others [2024] EAT 122 the Claimants brought claims for unfair dismissal. At a liability hearing, a tribunal found that the Claimants' protected disclosures were the reason for their dismissals. Their social media activity was found to have been a pretext or cloak for the dismissals.
At the remedy hearing Notaro argued that both basic and compensatory awards should be reduced under sections 122(2) and 123(6) of the Employment Rights Act 1996 (ERA). However, the tribunal found that it would not be just and equitable to reduce the award on the grounds of contributory fault. The tribunal came to this conclusion even though it was satisfied that the Claimants had committed culpable or blameworthy conduct in breaching Notaro's social media policy and further, their conduct had contributed to their dismissal.
The EAT decision
In reaching its decision, the EAT referred to previous authorities and concluded that it was not bound by them, nor was it bound by the statutory language of the ERA. The EAT found that the language in the ERA of "shall" means that, once there is a finding of culpable or blameworthy conduct which caused or contributed to the dismissal, the tribunal is obliged to consider the question of reduction. Where the tribunal is obliged to consider this question, what the tribunal has to decide is "such proportion as it considers just and equitable". The word "proportion" was used because the nature of the exercise is such that the tribunal should consider making a percentage reduction, rather than a reduction by a given absolute amount.
Key takeaways
This decision serves as a critical reminder to employers that even if an employee's actions contribute to their dismissal, this does not guarantee a reduction in any compensatory award that they may receive in a successful tribunal claim. A decision not to make a reduction for contributory fault is likely to be limited to circumstances where the tribunal finds that the employee's contributing conduct has not brought about the dismissal.