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Reducing unfair dismissal compensation due to the employee’s contributory fault

There are a number of mechanisms an Employment Tribunal can apply to reduce unfair dismissal compensation (such as a Polkey deduction etc), and this time we will explore the principles of ‘contributory fault’.

Even if an Employment Tribunal determines that an employee’s dismissal was unfair, it is open to the Tribunal to reduce the unfair dismissal compensatory award by up to 100% – washing away any compensatory award recovery!

Under the relevant legislation where the Tribunal finds that the dismissal “was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding”. This is an important principle for respondent employers seeking to minimise the parameters of compensation, if faced with an unfair dismissal claim which raises issues of contributory fault. The application of the law is very broad, and the Tribunal is obliged to consider applying this reduction if the facts support it/it has found contributory conduct by the former employee causing or contributing to the dismissal (to any extent).

If for example an employer has dismissed without completing a fair and thorough procedure, or it has dismissed unreasonably, if the facts indicate that the employee was to blame (to any extent) – committing blameworthy misconduct that contributed to the dismissal – the Tribunal will consider the percentage amount of reduction that should be applied.

The Employment Appeal Tribunal have recently last year even confirmed in the case of Wilkinson v Driver and Vehicle Standards Agency [2022] EAT 23, that a reduction for contributory fault may still be made even in circumstances where the facts indicate that, had the employer acted fairly there would have been no dismissal at all. Whilst such facts would exclude other compensation reductions (such as a Polkey reduction), the contributory fault principle is separate and will be considered. In this case a driving examiner drove the driving instructor’s car back to the test centre, which was prohibited by his employer, after terminating the driving test in the interests of public safety as the candidate’s conduct was considered unsafe for the public. The Employment Appeal Tribunal held that: “even where an employer’s decision to dismiss falls outside the band of reasonable responses, the employee may, by blameworthy conduct, nevertheless be said to have “contributed to” the dismissal in terms of section 123(6)” (of the Employment Rights Act 1996).

If you require any guidance on an employment disciplinary matter or unfair dismissal claim please do not hesitate to contact a member of the team.

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