Unfair dismissal: Reductions in compensation

12 March 2013

In the recent case of Montracon Ltd v Hardcastle the EAT reviewed the two different ways in which compensation for unfair dismissal may be reduced because of the claimant’s conduct.

In this case the claimant was employed as the driver of an unusually high trailer who drove it into a bridge causing extensive damage to the trailer.

He was summarily dismissed despite having 20 years’ unblemished service, which was considered by the tribunal to be unfair.

Taking his conduct into account, the tribunal reduced his compensatory award by 60% but considered it not just and equitable to reduce his basic award as well because no reasonable employer would have dismissed him for this first offence.

The EAT says this was wrong.

The compensatory award may be reduced where the claimant has contributed to his dismissal.

The basic award may be reduced by such amount as is just and equitable ‘when considering any conduct of the complainant before the dismissal’.

Considering the claimant’s conduct in this case, the basic award should be reduced by 30% to reflect the difference between the unchallenged deduction from the compensatory award and what was ‘just and equitable’ taking into account his length of service.

Point to note –

When deciding whether a dismissal was fair or unfair, it is relevant for a tribunal to consider whether the employer’s decision to dismiss was within ‘the range of reasonable responses’.

However, when deciding whether to make these deductions from compensation, the employer’s conduct is not a relevant factor in the assessment. Only the employee’s conduct is to be considered.