Polkey deductions

Thanks to Grahame Anderson of Littleton Chambers for preparing this case summary

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett this month.

Was an employment tribunal's failure explicitly to identify those factors that led it to a percentage Polkey reduction an error of law?

Yes, held the EAT in Contract Bottling Limited v Cave and McNaughton.

The Claimants were made redundant pursuant to an unfair selection process. The employment tribunal reduced their compensation on the basis of a 20% Polkey reduction. In the EAT, Langstaff P reiterates core Polkey principles. An employment tribunal's role is to engage with evidence (speculative albeit) to determine the chance of a fair dismissal taking place at some point in the future. Here, the employment tribunal 'rather plucked a figure in the air'. Unsurprisingly, that is not a safe approach.

Points to note:

(1) Where an employment tribunal does set out a reasoned connection between the evidence available to it as to the likelihood of fair dismissal "there can be no legitimate ground for criticising a particular percentage unless it is manifestly less than or more than the percentage which might have seemed proper".

(2) A purely mathematical approach will rarely be sufficient. Where, as in this case, 4 out of 10 pooled employees were in the event made redundant, it is not enough to give 40% as the percentage.

Following the President's example, employment tribunals would be well advised to identify all of those factors that might increase the chance of a fair dismissal, and all of those that decrease it, in order to come to a reasoned figure. This is art, not science.