Unfair dismissal and zero compensation: A lose-lose situation for everyone?

In the recent case of Ladrick Lemonious v Church Commissioners, the Employment Appeal Tribunal considered the question of to what extent compensation can and should be reduced to take into account the actions of the dismissed employee.

In this case, the wonderfully-alliterative, Ladrick Lemonious had been employed for 37 years before sending a number of emails in the names of other employees, one of which implied that another employee had committed a criminal offence.  Mr Lemonious was dismissed for gross misconduct; however, the Employment Tribunal found that dismissal to have been unfair as a result of procedural failings.  Despite the finding of unfair dismissal, the Tribunal decided it was appropriate to reduce Mr Lemonious' compensation to zero as a result of his behaviour which had contributed overwhelmingly to his dismissal.

No one was happy with this outcome.  Mr Lemonious was unhappy because he received no money despite "winning" his claim and his former employers were unhappy because it cost them a great deal to find out that they did not have to pay anything.  As a result, both parties appealed.

Mr Lemonious' appeal was based on the argument that if a dismissal was unfair, it cannot be right that no compensation be awarded.  The Church Commissioners' argument was that, as the Tribunal had concluded Mr Lemonious had lied in saying that he had not sent the offending emails, his behaviour in bringing the claim was so unreasonable as to justify a costs order being made.

The Employment Appeal Tribunal added to everyone's misery by concluding that there is nothing to prevent an award of zero compensation despite a finding of unfair dismissal and that a finding that an employee did commit an act of gross misconduct does not automatically mean costs should be awarded.

In short, whilst it pains us to say it, this seems to be a case where the only winners were the lawyers.

Despite the rather depressing outcome, employers should take note of the reasons for the finding that the dismissal was procedurally unfair:

  • The investigation involved "informal chats" with witnesses;
  • The Claimant was not given advance notice before being confronted with the emails in question;
  • No proper record was taken of the initial meeting with the Claimant;
  • The employer relied on a conversation with the Claimant which had not been recorded; and
  • The appeal panel consisted of three people, only two of whom expressed a view as to guilt, whereas the third stayed silent.

These procedural errors might appear relatively trivial; however, for want of a nail the Tribunal was lost.

Our view

We really can't stress it enough: in employment law, procedure is everything.