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Contributory Fault and Polkey
Rad Kohanzad represented Fargro Ltd in its appeal concerning contributory fault in an unfair dismissal compensation award. The Employment Appeal Tribunal (EAT) dismissed the appeal, holding that the Employment Tribunal had not erred by declining to make a finding of contributory fault where the available evidence did not support the necessary findings. The EAT also allowed part of Mr Hide’s cross-appeal: the Employment Tribunal had failed to address certain material arguments about procedural unfairness, and its assessment of the likelihood of dismissal in any event — known as a Polkey reduction — therefore had to be reconsidered.
Background and procedural history
Mr Hide worked for Fargro Ltd as an integrated pest management specialist from January 2013 until his dismissal in January 2020. Following workplace disagreements and allegations of misconduct, Fargro engaged external employment consultants to investigate the allegations and conduct the disciplinary and appeal hearings. A Fargro managing director, Mr Hopkins, made the final decisions to dismiss Mr Hide and reject his appeal, without meeting him at either stage.
The Employment Tribunal found that the dismissal was unfair. It considered the dismissal broadly fair in substance but identified procedural defects, including the same manager making both the dismissal and appeal decisions and the failure to address all the grounds of appeal. It reduced the compensatory award by 66.66% to reflect the chance that Mr Hide would have been dismissed even if a fair procedure had been followed. It made no further reduction for contributory fault.
Fargro appealed against the absence of a contributory fault reduction. Mr Hide cross-appealed, arguing that the Tribunal had failed to address further aspects of alleged unfairness and that this undermined its Polkey assessment. The EAT had to consider both whether the Tribunal should have made findings about Mr Hide’s own conduct and whether its reasons adequately addressed the arguments about the fairness of the dismissal.
Contributory fault: when must a tribunal make a deduction?
Under section 123(6) of the Employment Rights Act 1996, a tribunal must reduce the compensatory award where it finds that the dismissal was caused or contributed to by the employee’s action. The reduction must be just and equitable having regard to that finding. The relevant conduct must be culpable; the mere fact that an employee’s actions played a part in the events leading to dismissal does not automatically justify a deduction.
The EAT considered authorities including Swallow Security Services Ltd v Millicent and Carmelli Bakeries Ltd v Benali. Those authorities establish that a tribunal may need to consider contributory fault even if the employer has not raised it, where the facts and evidence make such a finding appropriate. But that does not mean a tribunal must construct a case for a represented party or search through the evidence for a case that the party has not properly advanced.
Why Fargro’s appeal failed
Fargro argued that the Employment Judge had failed to make the factual findings needed to assess contributory fault. Rad submitted that the absence of cross-examination about the alleged misconduct was not necessarily fatal to making findings about the employee’s conduct. The EAT did not accept that this established an error of law in the circumstances of this case.
The evidence about the alleged misconduct was limited. Mr Hide had only been cross-examined about the screensaver incident; there was little contemporaneous documentary evidence, and the employer had not identified the evidence or findings that it said the Employment Judge had overlooked. Making findings of culpability about other allegations would have required the Judge to decide matters that Mr Hide had not had a proper opportunity to answer.
The EAT therefore concluded that the Employment Judge had not erred by declining to find contributory fault. It distinguished between cases where the evidence calls for a tribunal to consider a deduction and cases where there is no adequate evidential basis for the necessary findings. The statutory duty to consider contribution does not remove the need for evidence supporting a finding of culpable conduct.
Procedural fairness and the Polkey reduction
Mr Hide’s cross-appeal succeeded in part. The EAT found that the Employment Tribunal had failed to address two material matters: that Mr Hide had not been shown documents put to him during the investigation, and the alleged failure to consider mitigation when deciding whether dismissal was a reasonable sanction. Those arguments were capable of affecting the assessment of procedural fairness and needed to be considered.
The EAT also considered the fact that Mr Hopkins had not met Mr Hide before deciding to dismiss him or rejecting his appeal. That fact did not, by itself, make the dismissal unfair. However, it raised a material question: had Mr Hide been given a proper opportunity to explain himself to the person making the decisions, including on mitigation? The Employment Tribunal had not adequately addressed that question.
The EAT did not find that every criticism raised by Mr Hide was material or that the dismissal was necessarily unfair for each additional reason he advanced. Its conclusion was narrower: certain material arguments required consideration, and the Employment Tribunal’s reasons did not show that they had been properly assessed.
That omission affected the Polkey calculation. A Polkey reduction estimates the chance that an employee would have been dismissed even if the employer had acted fairly. That counterfactual must take account of the relevant respects in which the dismissal was unfair. Because further findings of unfairness might affect the assessment, the EAT set aside the 66.66% reduction for reconsideration.
What the decision means
A contributory fault deduction requires an evidential basis. A tribunal may need to consider contribution even if the employer has not pursued the point, but it is not generally required to search for evidence to construct a case that a party has not articulated.
Employees must have a fair opportunity to answer allegations. Findings of culpable conduct should not be based on allegations the employee has not had a proper opportunity to address.
Material arguments about fairness can affect compensation. A tribunal need not discuss every submission, but it must address material arguments. Where those arguments could affect the findings about unfairness, the Polkey assessment may need to be reconsidered.
A decision-maker need not always meet the employee personally, but the circumstances matter. The absence of a meeting does not automatically make a dismissal unfair. The question includes whether the employee had a proper opportunity to explain their position to the decision-maker.
Considering an appeal about unfair dismissal or compensation?
An Employment Tribunal’s decision may raise questions about whether it applied the correct legal test, made findings supported by the evidence, gave adequate reasons or properly assessed the effect of procedural unfairness on compensation. But an unfavourable outcome or an incomplete explanation does not automatically establish an appealable error of law. The specific reasoning and evidence must be examined.
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Case details
Case: Fargro Ltd v Mr David Hide
Neutral citation: [2026] EAT 162
Judgment date: 21 October 2026
Judge: Her Honour Judge Joffe
Case number: EA-2023-000230-AS
Counsel for Fargro Ltd: Rad Kohanzad, instructed by Croner Group Limited
Counsel for Mr Hide: Jonathan Davies, instructed by OH Parsons LLP
Outcome: Fargro’s appeal dismissed. Mr Hide’s cross-appeal allowed in part. The Polkey assessment was set aside, with the matter to be remitted for further consideration. The EAT invited submissions on the terms and destination of the remittal.
Official judgment: Read the full EAT judgment (PDF)
