EAT upholds a decision not to reduce compensation where contributory fault found
In Notaro Homes Ltd v Keirle & others [2024] EAT 122, the EAT has upheld a Tribunal decision not to award a reduction to compensation where contributory fault by the employees was found.
In an unfair dismissal claim, the Tribunal has a wide discretion to reduce both the basic and compensatory awards due to the claimant’s conduct, where it is just and equitable to do so. In this case, all the claimants were allegedly dismissed for breaches of Notaro’s social media policy. The claimants claimed it was because they had made multiple protected disclosures. The Tribunal agreed with the claimants, that their protected disclosures were the reason for the dismissals. Their social media activity was a “pretext or cloak” for the dismissals.
At the remedy hearing, the Tribunal was satisfied that the claimants had breached the social media policy, and that this had contributed to their dismissal, but found that it wasn’t the reason or principal reason for the dismissal and so it would not be just and equitable to reduce compensation for contributory fault. The Tribunal partly relied on its finding that the dismissing office had accepted that the conduct did not constitute gross misconduct or merit dismissal. Notaro Homes appealed. They said that if there was a finding of contributory fault, the tribunal had erred in failing to reduce compensation.
The EAT dismissed the appeal. While a finding of contributory fault ordinarily leads to a reduction, there is no obligation to make a reduction where it was not just and equitable to do so. Here, where the dismissing officer had accepted the conduct wasn’t gross misconduct or conduct warranting dismissal, it was open to the Tribunal to decide not to award a reduction.
Why does this case matter?
This case reaffirms the Tribunal’s wide discretion on the question on whether or not to award contributory fault reductions to compensation. It is always best to rely on a potentially fair reason for dismissal (conduct, capability, redundancy, illegality or “some other substantial reason”) and follow a fair and reasonable procedure, to avoid a finding of unfair dismissal. However, being able to rely on a reduction of up to 100% of compensation for contributory fault can be helpful where the employee has been guilty of conduct which would ordinarily justify dismissal. Here, the employee’s conduct did not justify dismissal, which meant it was reasonable for the Tribunal not to make any deduction for contributory fault. It will still be unusual for no reduction to be made where there is contributory fault found.
If you need any support with a dismissal process, please do get in touch with the team.