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Deductions from wages: Redundancy payment deducted after "Polkey reduction"

This report relates to 1 case(s)

The correct method for calculating the compensatory award for unfair dismissal of an employee dismissed by reason of redundancy, where the employee received a contractual redundancy payment and the industrial tribunal found that there was a 50% chance that he would have been retained if a fair procedure had been followed, is to halve the employee's loss arising from the dismissal and then to deduct the redundancy payment from that sum, holds the EAT in Digital Equipment Co Ltd v Clements [1996] IRLR 513. An industrial tribunal erred in law in deducting the redundancy payment before the "Polkey reduction". The reduction made for the redundancy payment had to reflect the whole of its amount, and the tribunal's approach only gave credit to the employer for half of it.