Claimants who are successful in an unfair dismissal claim will receive compensation consisting of two elements: a basic award (equivalent to a statutory redundancy payment, based on age, length of service and weekly pay); and a compensatory award for financial losses suffered as a result of dismissal up to set maximum limits. The compensatory award may be reduced if the employee caused or contributed to their dismissal by a proportion that the Tribunal considers just and equitable. In contrast, the basic award may be reduced if the Employment Tribunal considers that this is just and equitable due to the employee’s conduct before their dismissal, but there is no causation requirement.
A finding of culpable or blameworthy conduct by the employee which to some extent caused or contributed to their dismissal will normally lead to a reduction in the compensatory award. However, in Notaro Homes Ltd v Keirle and others, the Employment Appeal Tribunal (EAT) has confirmed that a Tribunal is not actually required to reduce the compensatory award in these circumstances.
In this case, several employees of a nursing home provider were dismissed for making social media posts that breached the company’s social media policy. The Employment Tribunal found that this was a pretext and that the real reason for their dismissal was that they had made protected disclosures. At the remedy hearing, the Tribunal therefore decided that it was not just and equitable to reduce the basic and compensatory awards on grounds of contributory fault. Although the employees had committed blameworthy conduct by breaching Notaro’s social media policy, in reality the company had seized on that opportunity to dismiss them because they had blown the whistle.
Notaro appealed on the basis that if there was a finding of contributory fault, then the Tribunal was legally obliged to reduce the compensatory award. The EAT dismissed this argument. Although contributory fault will normally lead to a reduction, the wording of the ERA does not require a Tribunal to do so where it is not just and equitable. Given the circumstances in this case, where the dismissing officer had also accepted that the employees’ conduct did not amount to gross misconduct, it had been open to the Tribunal to decide not to reduce the compensatory award.
This case highlights that Tribunals have a wide discretion as to whether to reduce an award of compensation. The employees’ conduct in this case only led to or contributed to their dismissal by providing their employer with a pretext, so it was just and equitable that their compensation should not be reduced. The contributory fault itself could not be said to have caused the dismissal. However, it will only be in rare cases that no reduction is made where there has been a finding of contributory fault.
