Software 2000 Ltd v Andrews and others

EAT: Elias J (President), Mr D Bleiman and Mrs Mc Arthur: 26 January 2007

The claimants were dismissed following a redundancy exercise. Their complaints of unfair dismissal were upheld by an employment tribunal which held that, although the criteria for selection were not unfair, it was not satisfied that they had been properly applied, in that the employers had failed to give sufficient guidance to those carrying out the exercise on how the criteria were to be assessed, and two of the claimants should have been considered for an alternative post. The tribunal considered that the evidence was too unreliable to enable it to conclude that the claimants would have been dismissed, even if the procedure had been fair, and, accordingly, it rejected the employers' submission that the dismissals were fair under section 98A(2) of the Employment Rights Act 1996. In assessing the compensatory award under section 123(1) of the Act, the tribunal made no reduction to take account of any chance that the claimants would have been dismissed in any event.

The employers appealed.

The Employment Appeal Tribunal held:
In most cases the determination, under section 123 of the Employment Rights Act 1996, of the loss sustained in consequence of a dismissal, would involve a tribunal predicting for how long the employee would have been employed but for the dismissal. The evidence might be insufficient for a tribunal to say that, on a balance of probabilities, the employee would have been fairly dismissed in any event, yet sufficient for it to conclude that there must have been some realistic chance that he would have been, in which case some assessment had to be made of that risk when calculating the compensation. The tribunal, having properly considered the evidence for the purposes of section 98A(2) of the Employment Rights Act 1996, had failed to go on to address specifically the question of whether there was evidence which was reliable and might justify a reduction in compensation, and, since there was evidence of sufficient reliability to engage in such an exercise, the matter would be remitted to the tribunal.

The appeal was allowed and the case remitted.

Appearances: Daniel Tatton-Brown (Metson Cross) for the employers; Judy Stone (Lemon & Co) for the claimants.