Unfair dismissal – redundancy
If an employee wins an unfair dismissal case, the employment tribunal will decide how much compensation is due. If the employer has made procedural errors during the dismissal, and the tribunal decides that the employee would have been dismissed anyway had a fair procedure been followed, the tribunal can reduce compensation to zero. This principle is known as the Polkey principle – named after the case from which the principle derived. The EAT has considered this issue recently in Teixeira v Zaika Restaurants.
The employee was a chef who worked in a team of ten at a restaurant in London. He was the only non-specialised chef and the least experienced. When the pandemic hit, the restaurant was affected, and they made the employee redundant without any warning or consultation. The employee brought an unfair dismissal claim. The tribunal found that his dismissal had been procedurally unfair. However, they said that a pool of one would have been fair in this case and therefore his dismissal was inevitable even if a fair procedure had been followed. They awarded him no compensation. The EAT disagreed.
The EAT disagreed. The dismissal had been procedurally unfair as there had been no warning or consultation. The tribunal had not considered the requirement for some consultation which may have widened the pool of employees at risk. Even if dismissal had been inevitable, that process would have delayed the employee’s dismissal which meant that some compensation would be justified. The EAT said that a pool of one without any warning could be fair, but it was difficult to see how it could have been in this case where the restaurant continued to operate, and all the other chefs were retained. The tribunal had not provided reasons why it was fair here. The case was sent back to the same tribunal to deal with the compensation.
This case shows that an award of zero compensation for an unfair dismissal must be properly reasoned and justified. In some cases, pools of one and no warning may be fair. This case is a warning to employers about the dangers of abandoning a fair process, even in the face of something as serious as a pandemic and something as obvious as the downturn in business for hospitality. Even in extreme circumstances, the absence of a fair procedure can be costly.