EAT Unfair Dismissal – Polkey deduction
The two Claimants were dismissed unfairly because their employer thought that whilst directors, and later (after they had resigned as directors) they had colluded with a third party to help set up a company trading in meaningful competition to the employer. 15% contribution from one employee (‘E’) was awarded, but none from the other (‘C’). On appeal, a contention that the Employment Tribunal had wrongly failed to consider evidence that when directors E and C had failed to tell their employer that a competitor was about to be established (in breach of the fiduciary duty derived from the Companies Act 2006 and from caselaw which obliged this) was rejected: on a careful reading of the Judgment as a whole, the Employment Tribunal had considered that the Claimants did not know that the rival business would in fact be in meaningful competition with the employer, and on this finding there was no breach of duty such as to affect contributory fault. In any event, the case-law was relied on for one sentence, which had to be taken both in context and with a recognition that every case turned on its own particular facts.
A second ground was that the Employment Tribunal thought it did not have enough material to decide whether there should be a deduction from damages for the chance that E would have been fairly dismissed within his period of notice (which he had already given), but went on to find as a fact that he was guilty of misconduct, and could have been summarily dismissed for that. These two findings were on the face of them inconsistent and irreconcilable. It was almost inevitable that there would be at least some risk of a fair dismissal if E’s employment had continued long enough. The case would be remitted to the Employment Tribunal to determine the question of whether a Polkey deduction was appropriate, and if so to what extent, on the footing it did have enough evidence to think that E could have been summarily dismissed and that at the date of actual (unfair) dismissal his employer probably knew enough of the relevant facts to take steps to do so.
Langstaff P J
[2015] UKEAT 0416 – 14 – 0303
Bailii
England and Wales
Employment
Updated: 30 December 2021; Ref: scu.546432