An employee’s award of compensation for unfair dismissal normally consists of two elements – basic award and compensatory award. The basic award is not related to the loss suffered but is calculated according to a standard formula based on the length of service and age of the claimant. Compensatory award is based on the financial loss suffered by the claimant as a result of his or her dismissal, insofar as that loss is attributable to action taken by the employer. Reductions to the basic award and the compensatory award can be made if the employee’s conduct has contributed to their dismissal.
In Montracon Limited v Hardcastle, Mr Hardcastle was dismissed from his employment as an HGV driver after he forgot the height of the trailer he was using and collided with a bridge, causing £2,500 worth of damage to the vehicle. Although Mr Hardcastle had a 20-year unblemished driving record with no previous accidents, his employer, Montracon Limited, had a policy that dismissal must follow a driver hitting a bridge. At the ensuing disciplinary proceedings, Mr Hardcastle was found guilty of gross misconduct and reckless damage of company property and was summarily dismissed.
Mr Hardcastle brought a claim of unfair dismissal. Whilst finding that his conduct was ‘clearly culpable and seriously culpable’, the majority of the Employment Tribunal (ET) was satisfied that dismissal fell outside the range of reasonable responses open to the employer. The level of his contribution to his dismissal was assessed at 60 per cent and the compensatory award was reduced accordingly. However, in the ET’s view, this was an exceptional case. Mr Hardcastle had a long record of unblemished service and it would not be just and equitable to make a reduction to the basic award.
Montracon appealed against the ET’s decision not to reduce the amount of the basic award.
The Employment Appeal Tribunal (EAT) found that the ET had been entitled to take into account Mr Hardcastle’s service record with his employer but that his employer’s action in unfairly dismissing him was not a relevant factor. More significantly, in making a nil reduction to the basic award, the ET had failed to attach any weight to Mr Hardcastle’s own conduct. Given the ET’s findings with regard to his culpability, it had erred in deciding that a nil reduction was appropriate.
The EAT concluded that it was just and equitable in the circumstances to make a reduction of 30 per cent to the basic award.
If you consider that an employee’s behaviour justifies dismissal on gross misconduct or other grounds, contact us for advice before you act.