Polkey Deduction

Hello , this week’s case comes a day early because, due to Easter, we have a bank holiday tomorrow, one of the few occasions any weekend reveller can rejoice at having ‘that Thursday feeling’. PJH Law would also like to take this opportunity to wish you a Happy Easter, and, more importantly, a relaxing long weekend.

There are seldom any interesting employment law cases or issues involving Easter, and, unsurprisingly, we don’t have any cases this week involving rabbits, chocolate, religion or former employees returning from the dead. However, what we do have is a piece on how an early Easter this year could create annual leave issues next year.

This week’s case concerns the issue of Polkey deductions and before beginning the facts of this case lets clarify what a Polkey deduction is.

The Polkey deduction is a partial or complete reduction to a Claimant’s compensatory award. It takes its name from the case of Polkey v AE Dayton Services Ltd, where a van driver was made redundant on the spot. Whilst no fair procedure was followed, redundancies were necessary and Mr Polkey would have been made redundant even if correct procedures were adhered to. Therefore, a Tribunal can reduce a compensatory award to accommodate the fact dismissal was inevitable, even if it was unfair.

Mr Kapoor, the Claimant, was employed by Balfour Beatty, the Respondent. Following a restructuring exercise the Claimant was redeployed to a new role. The new role involved managing an account with one of the Respondent’s key clients. The Claimant did not perform well in the role, particularly his relationship with the client was poor. The Claimant also failed to record his work internally for review and monitoring.

Without following its capability policy the Respondent dismissed the Claimant for failing to nurture the relationship between the Respondent and the client, failing to follow internal reporting procedures and concerns about his ability to handle the role.

Unfair Dismissal Claims

The Claimant thought this was unfair and began Tribunal proceedings. The Respondent admitted that the Claimant’s dismissal may have been unfair because they had not followed procedure, however, the Claimant would have been dismissed fairly on capability grounds due to his poor performance and therefore suffered no losses.

The ET found that the Claimant had been unfairly dismissed but held that there was an 85% chance he would have been dismissed anyway and applied the Polkey deduction accordingly. It further held that the Claimant was not entitled to any bonus he may have received if he were not dismissed for the same reasons.

The Claimant appealed but the EAT rejected the appeal. It found that the ET had rightly found the Claimant to be unfairly dismissed and agreed it was correct in applying an 85% Polkey deduction.

The takeaway point:

Employers will always be in a stronger position to fight unfair dismissal claims if they have followed the correct procedure. However, if they have failed to carry out a fair dismissal that doesn’t necessarily mean they are going to have to pay large amounts of compensation. The Polkey deduction means compensation awards can be reduced by up to 100% if the employer can prove the dismissal was inevitable. Read more cases about Polkey here.