Employment Tribunal Compensation – Reinstatement and Deductions from Compensation

Two of the remedies that an Employment Tribunal can award to you if you are successful in your claim are compensation and/or reinstatement.

If you are awarded compensation then the Employment Tribunal can make a ‘Polkey’ deduction, i.e. a reduction in your compensation because you would have likely been dismissed anyway. For more information see our article Deductions from Compensation – Polkey.

A recent decision in the Employment Appeal Tribunal decided whether an Employment Tribunal could make a Polkey deduction from compensation and order that the employee be reinstated.

In the case of Arriva London v Eleftheriou, Mr Eleftheriou was a bus driver who was dismissed for capability reasons after an accident at home prevented him from working.  He claimed unfair dismissal in the Employment Tribunal and by the time of the Hearing he had made a full recovery from his injuries. As a result when he was successful with his claim the Employment Tribunal ordered that Arriva London reinstate him. They also ordered that Mr Eleftheriou receive compensation for his loss of earnings for the period from his dismissal to reinstatement.  However they reduced the amount he received by 60% after deciding that it would have been likely that Mr Eleftheriou would have been dismissed fairly if Arriva London had followed a fair and proper procedure over time.

Arriva London appealed to the Employment Appeal Tribunal who decided that there was nothing to prevent the Tribunal from making an order for reinstatement even though there had been a Polkey deduction.

The Employment Rights Act, which contains the law regarding unfair dsmissal, states that the Tribunal must consider reinstatement before they consider compensation.

In considering reinstatement the Tribunal must look at the following:

1)      Whether the employee wishes to be reinstated

2)      Whether it is practicable for the Employer to comply with reinstatement

3)      Where the employee in some way caused or contributed to the dismissal, whether it is fair to order reinstatement.

In Mr Eleftheriou’s case the Employment Appeal Tribunal decided that an order for reinstatement was appropriate and that it did not matter that there had been a Polkey deduction to compensation, this was irrelevant to the considerations listed above.