Appeal No. UKEATS/0011/11/BI
EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH EH3 7HF
At the Tribunal
On 14 October 2011
Before
THE HONOURABLE LADY SMITH
MISS J GASKELL
MRS A HIBBERD
MISS
LINDA STEWART APPELLANT
NEXT
RETAIL LTD RESPONDENT
Transcript of Proceedings
JUDGMENT
THE HONOURABLE LADY SMITH
Introduction
1.
This is the case of Linda Stewart against Next Retail Ltd, which
comes before us this morning as a full hearing. It is an employee’s appeal
from the Judgment of the Employment Tribunal sitting at Aberdeen,
Employment Judge Mr J M Hendry. The Judgment was
registered on 13 January 2011. Mr Lefevre, solicitor, appeared
before us for the Appellant, who is the Claimant. There was no appearance for
the Respondents, their solicitors having confirmed that they did not seek to
oppose the appeal, although they did not concede it.
2.
The Tribunal in this case found that the Claimant was unfairly dismissed
in respect that the Respondents had not carried out a fair investigation,; that
is, applying the test under s.98(4) of the Employment Rights Act 1996,
the dismissal was not fair. Having read the Judgment we can see that it was
not simply a matter of there being any flaw in procedure; indeed, there is no
procedural flaw as such, pointed to by the Tribunal. Their concern was one of
substance. They found that the Respondents had not carried out a full and fair
investigation into the Claimant’s medical condition, prior to deciding to
dismiss her.
3.
Having found that the Claimant was unfairly dismissed, the Tribunal
turned to remedy. The Claimant had found alternative employment and so the
question of a compensatory award did not arise. The Tribunal, accordingly,
restricted their award to (a) a basic award; and (b) an award for loss of
statutory rights. The basic award was correctly calculated as being £4,220.46,
but the Tribunal then applied a 50% deduction. The Tribunal explained the
thinking behind their deduction at paragraph 87, which was in the following
terms.
“87. Finally, we consider whether the claimant would have been
dismissed in any event. Would further investigations have made any difference
to the outcome? This is not an easy matter for us to resolve. We cannot say
that there could have been no possible difference in the outcome. There
certainly would have been a delay in the dismissal taking place. We do not
know if the claimant would have continued to have persistent absences or if the
medical evidence indicated that the absences were part of an underlying
condition if a relaxation in the system operated by the employers would have
allowed the claimant to keep her job. The chances of the claimant ultimately
losing her job were in our opinion as likely as her keeping it and accordingly
we will reduce the award by 50% to reflect this.”
4.
That is, they would appear to have applied what is often referred to as a
Polkey deduction: see Polkey v A E Dayton Services Ltd
[1987] IRLR 503. We accept Mr Lefevre’s
submissions that the Tribunal were wrong to do so. First, Polkey
deductions can only be made in cases where a dismissal is unfair on account of
a flaw in the procedure. Examples would be a failure to provide an employee
with notice of the charge that he has to answer at a disciplinary hearing or
not affording an employee an opportunity to appeal, or not allowing an employee
to appear at a disciplinary hearing.
5.
It is plain that, in this case, the Tribunal’s concern was not a
procedural one. There was no flaw of that sort that they pointed to. They
pointed to a substantial defect in the employer’s approach to the matter that
they had to address, and a wholesale failure to investigate that went to the
heart, as we see it, of the s.98(4) tests that they had to apply.
6.
Secondly, deductions on Polkey grounds can only, in any
event, be made from an award of compensation under s.123 of the Employment Rights Act 1996.
It seems plain to us from the speech of Lord Bridge in the case of Polkey
that that was envisaged by their Lordships and, indeed, it makes sense.
Further, the terms of s.122(2), which relate to basic awards, differ from those
of s.123(1). The general power to assess compensation on just and equitable
grounds that appears in s.123(1) and enables Polkey deductions to
be made, does not appear in s.122(2). There, the power to reduce the basic
award on just and equitable grounds is restricted to where there is
contributory conduct by the complainant.
7.
There was no misconduct or contribution by the Claimant in this case that
contributed to her dismissal, and so there was no basis on which it was
competent for the Tribunal to reduce the basic award. Whilst it might be said,
of course, that the £250 for loss of statutory rights is a compensatory award,
and so it would have been competent to reduce it, as we have explained, we
accept that this dismissal was substantively unfair, not procedurally unfair,
and so it would not be appropriate to apply any abatement to it.
8.
We will, accordingly, allow the appeal, set aside the Tribunal’s award
and substitute for it the sum of £4,470.46, that is a basic award of £4,220.46
plus an award for loss of statutory rights of £250.
