In the Spotlight: What Is a Polkey Deduction and How Might It Affect Your Unfair Dismissal Compensation?
In the Spotlight: Tribunal Claims Soar – What Is a Polkey Deduction and How Might It Affect Your Unfair Dismissal Compensation?
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If you’ve been unfairly dismissed from your job, you might be entitled to compensation. There’s a legal principle known as a Polkey deduction that could reduce the amount you receive, even if your dismissal was ruled unfair. It’s important for employees to understand how this works and when it might apply.
What is a Polkey deduction?
The idea of a Polkey deduction comes from a legal case called Polkey v AE Dayton Services Ltd (1987). In that case, the court ruled that if an employee is unfairly dismissed, but there’s a chance they would have been dismissed anyway even if the correct procedure had been followed, then compensation can be reduced.
Put simply, it means:
Even though your employer messed up the dismissal process, if the outcome would likely have been the same (i.e. you would have lost your job anyway), the compensation you're awarded may be cut to reflect that.
This doesn't mean the dismissal becomes "fair" - it’s still legally unfair but it affects how much the tribunal thinks you've actually lost as a result.
How does a tribunal decide if a Polkey deduction applies?
The tribunal looks at what would have happened if the employer had followed a fair process. For example, if you were dismissed without a proper disciplinary hearing, the question becomes:
Would a fair disciplinary hearing still have led to dismissal?
If the answer is “yes, probably,” then your compensation might be reduced to reflect that outcome.
But this is based on real evidence—not guesses. The tribunal needs to consider the likely thought process of your actual employer (not just what a perfect employer might have done), and whether there’s a good chance they would still have dismissed you, or perhaps given you a lesser warning or penalty.
Polkey deductions can be made in cases where the dismissal is either procedurally or substantively unfair and may be made in all types of case. In Audere Medical Services Ltd v Sanderson UKEAT/0409/12/RN, the Employment Appeal Tribunal found that, as a matter of principle, there was no reason why a Polkey reduction could not be made in cases of automatic unfair dismissal, provided the circumstances warranted it.
A Tribunal can make Polkey and contributory fault deductions in the same case, as they are intended to cover different things. A Polkey reduction is intended to assess the amount of loss attributable to the unfair dismissal, and should be considered first. Contributory fault is intended to reflect the amount by which the compensable loss should be reduced to take account of the employee’s conduct.
What kind of evidence is considered?
All the evidence is taken into account—not just what the employer says. Your own testimony, documents, or witness evidence could be just as important.
However, for a Polkey deduction to apply, the employer must raise it as an argument and provide some evidence. If they fail to do this, the tribunal may not make any reduction at all.
For instance, in a case where the employer didn’t provide any evidence or argue for a deduction the tribunal awarded full compensation.
Can the deduction be partial?
Yes. If the tribunal believes there was, say, a 50% chance you’d have been fairly dismissed anyway, it might reduce your compensation by 50%. It's not an all-or-nothing assessment -sometimes the tribunal will make an educated estimate based on probability and fairness.
In some cases, the tribunal might conclude that no reasonable employer would have dismissed you even after a fair process. In that scenario, no Polkey deduction should apply at all.
Why this matters
Understanding Polkey deductions is important if you’re pursuing an unfair dismissal claim. It helps set realistic expectations around compensation and gives you insight into how your former employer might try to defend the case.
It also means that:
- You should gather as much evidence as possible to show why your dismissal wouldn’t have happened if proper procedures were followed.
- You’ll need legal advice to counter any attempts by your employer to reduce compensation unfairly.
Need advice?
If you’ve been dismissed and you’re unsure whether a Polkey deduction might apply to your case, feel free to contact us. We can help assess your position and guide you through the claims process to give you the best possible chance of success.
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At Springhouse Solicitors we offer a range of services, so please contact our friendly customer services team to discuss further via hello@kilgannonlaw.co.uk or 0800 915 7777.
Disclaimer
The above provides a general overview of areas in employment law and is not intended nor construed as providing specific legal advice. This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice.
28.04.24
