UK Employment Law Update: Unfair dismissal compensation - deductions allowed

16 May 2014

In Frith Accountants v Law, the EAT considered the case of an employee who had resigned and successfully claimed constructive dismissal. Her employer had been in repudiatory breach of the implied duty of trust and confidence by raising issues about her capability with her son rather than with her directly. However, there was evidence to show that she had become careless in her work and also resistant to criticism.

Should her compensation be reduced because of her conduct?

The EAT considered that the same rules should apply in the case of both actual and constructive dismissal. Firstly, has the claimant’s conduct been culpable or blameworthy? In this case, it had.

If so, a tribunal may reduce the compensatory award but only where the claimant’s conduct contributed to the dismissal. This would be very unusual in a constructive dismissal case where it will be the employer’s conduct that has caused the claimant to resign.

A tribunal may also reduce the basic award where it considered he claimant’s conduct makes it just and equitable for them to do so. The EAT considered such a deduction to be appropriate in this case.

Points to note –
• Employers should appreciate the different ways in which evidence of culpable or blameworthy conduct by a successful claimant may lead to a reduction in the compensation awarded – note constructive dismissal cases.
• In addition, compensation may also be reduced to reflect the fact that there was a chance that the claimant’s conduct (poor performance) would have led to her actual dismissal in the near future. In this case, a 40% deduction was applied.