Uplift of compensatory award

Case 7: The facts

Mr Butler was made redundant when his employer decided that it only needed one supervisor instead of two. He was not offered any alternative work, and his employer did not follow any of the statutory procedures when dismissing him.

A tribunal upheld Butler’s claim of unfair dismissal, and increased his compensation by 30% to reflect the employer’s failure to follow any procedures. Butler appealed, saying the uplift should have been larger.

The ruling

The Employment Appeal Tribunal (EAT) upheld the tribunal’s decision. In cases involving a failure to follow statutory procedures, it said, the tribunal has discretion to set the amount of compensation uplift at any amount between 10% and 50% – or not to increase the award at all in exceptional circumstances.

The tribunal had assessed that the uplift should be at the higher end (30% to 50%), and had acted accordingly. The principles involved are different to those under other laws, such as protective awards, where the tribunal starts at the top and reduces the penalty only if there are mitigating circumstances.

The EAT also upheld the tribunal’s decision to make a “Polkey” reduction, reflecting its assessment that there was only a one-in-three chance that Butler would have been offered an alternative job had his employer followed the procedures.