Important Clarification of the Polkey Principle 

Kings Chambers’ Nicholas Siddall and Paras Gorasia successfully appeared in the recent judgment of the EAT in Pybus-v-Geoquip (HHJ Birtles) handed down on April 13th 2011.

In this matter the Claimant had been found to be unfairly dismissed and at a remedy hearing the Employment Tribunal had found that the Claimant stood a 35% chance of being dismissed at the time of his actual dismissal had the Respondent followed a fair procedure. Further it found that in any event his employment would not have continued beyond 9 months from the point of dismissal.

The decision of the EAT is authority for the following propositions:

1. Any deduction from a Claimant's compensation on the basis that a fair procedure would have led to a different result must be evidence based. Here the speculation of what a third party might have said had they been asked was not a proper basis for the application of a Polkey deduction. In reaching that conclusion it followed dicta in the earlier judgment of Pinewood Repro Ltd (trading as County Print) v Page [2010] UK EAT/0028/10/SM (in which Nicholas Siddall also appeared).
2. Any Polkey deduction must also have regard to the underlying contractual situation. Here the Claimant was employed under a fixed term contract of employment and thus the Employment Tribunal erred in not recognising that the early termination of the Claimant's contract would not affect his right to payment.
3. Any Polkey deduction must be adequately reasoned. Here the judgment of the Employment Tribunal was criticised as plucking a period from the air without any explanation as to why the same was appropriate.

The Claimant also argued that there was an error in principle for the Employment Tribunal to apply a “double” Polkey deduction of a 35% chance of dismissal and a finding that the Claimant's employment would have terminated within 9 months in any event. As a result of the findings made above the EAT sadly concluded that it need not consider that issue of wider principle.

Click here to view Pybus Judgement

Click here to view Page Judgement