Cox v Northern Devon Healthcare NHS Trust – unfair dismissal, compensation and contributory fault

This case is one which concerns unfair dismissal and how the Employment Tribunal should deal with issues of contributory fault when liability has been determined and remedy is being deliberated. The Employment Tribunal failed to identify how the Claimant’s conduct could have been blameworthy, stated that he was at fault for issues he could not have been at fault for, and had misunderstood the application of the test of loss of mutual trust and confidence.

The facts in Cox v Northern Devon Healthcare NHS Trust

Mr Cox was employed by the Respondent as a maintenance assistant. He had become concerned about breaches of health and safety which could have put the well-being of patients and others at risk and submitted a grievance utilising the established whistleblowing procedures in place at his workplace in April 2006. In November 2007 the Respondent’s manager called a general meeting in which it was indicated that ill-founded and malicious complaints had been made. It was clear that efforts were being made to identify the source of the complaint. The Claimant was understandably concerned about this and complained to his employer that he should have been able to remain anonymous in his whistleblowing complaint. He further stated to his employer that he would cease working until this latest complaint had been resolved. The employer took his notice of withdrawal from work as a refusal to work and dismissed him on 19 November 2007. The Claimant appealed and the hospital management determined the decision to dismiss the Claimant was wrong. However, the Claimant was unhappy at being reinstated to his former post in the Estates Management department because of criticisms he had made of the running of the department. These issues were not resolved and the Claimant subsequently submitted claims for constructive unfair dismissal and, in the alternative, unfair dismissal.

The Employment Tribunal found that the Claimant had been unfairly constructively dismissed. However, it did consider that the Claimant’s compensation should be reduced by 80% because of his contributory conduct. The Claimant appealed on this point and the Respondent cross-appealed on the basis that the a Polkey reduction should have been applied (that the Claimant would have been dismissed anyway).

The law relating to compensation in unfair dismissal cases

If an employee is unfairly dismissed or unfairly constructively dismissed the award that the Claimant receives is split into two separate, broad heads – the basic award and the compensatory award. The basic award is calculated by multiplying together the Claimant’s length of continuous service, age, and weekly gross pay. The compensatory award is supposed to compensate the Claimant for financial loss relating to the loss of their employment – for example loss of earnings, loss of contractual benefits and the loss of their statutory rights.

Even if a Respondent is found to have unfairly dismissed an employee, there are a number of ways in which compensation can be reduced in an unfair dismissal case. These are:

  1. A failure to mitigate – the employee has a duty to attempt to find new employment as soon as possible after termination. If the employee unreasonably fails to find new employment (i.e. they don’t submit any job applications) then they will be penalised by a reduction in their compensation
  2. A Polkey reduction – Respondents often argue that Polkey reductions should apply – that the employee would have been dismissed anyway but for any procedural unfairness. If the Employment Tribunal believe this is the case then the employee’s compensation will be reduced to the relevant extent
  3. Contributory fault – if the employee is in some way at fault for their dismissal then the amount of compensation can be reduced to reflect this
  4. A failure to follow the ACAS code – if the employee has failed to follow the ACAS code (i.e. by not appealing a dismissal) then their compensation can be reduced to reflect this

The basic award and/or the compensatory award can be reduced (to nothing if the circumstances demand it). For the basic and compensatory award to be reduced it must be just and equitable to do so.

The Employment Appeal Tribunal’s decision in Cox v Northern Devon Healthcare NHS Trust

The Employment Appeal Tribunal held that the Employment Tribunal failed to identify how the Claimant’s conduct could have been blameworthy. The Employment Tribunal had failed to give sufficient reasons on this point. Further, he could not have been at fault for a number of the issues specified by the Employment Tribunal, and the Employment Tribunal had misunderstood the application of the test of loss of mutual trust and confidence.

Our specialist employment solicitors’ thoughts on Cox v Northern Devon Healthcare NHS Trust

This unfair dismissal case highlights how the Employment Tribunal can get things wrong sometimes. It also highlights the potential difference that representation can make in the Employment Tribunal – the Claimant was unrepresented throughout this case (even at the Employment Appeal Tribunal, a brave move) whilst the Respondent was represented by Counsel at the Employment Tribunal and subsequent appeals.