Reinstatement and re-engagement are remedies a tribunal must consider whenever a claimant indicates a desire for either of them. Arriva London Ltd v Eleftheriou deals with the matter of when a tribunal finds that a dismissal is unfair, but on the facts there is a chance that the claimant would have been dismissed fairly had a fair procedure been followed. Can a tribunal order reinstatement in such a situation?

Mr Eleftheriou was dismissed from his job as a bus driver in May 2010 while he was waiting for surgery following an injury that prevented him from driving. He had been off sick since January that year. His employer, Arriva, did not seek any medical opinion as to when he would be fit for work before deciding on dismissal. His unfair dismissal case was heard in February 2012, by which time he was fully recovered and was working as a driver for a different company, at a significantly lower salary. The dismissal was found to be unfair, because of the employer’s failure to consider medical evidence before making a decision.

He asked for reinstatement, which the Tribunal granted. It then went on to work out the loss suffered by Mr Eleftheriou between dismissal and the reinstatement order. Then it deducted 60% from that amount, on the basis that there was a 60% chance he could have been fairly dismissed if Arriva had sought medical evidence at the point when they were considering dismissal

Arriva argued that these two orders were inconsistent – it was unfair to order reinstatement where there was a 60% chance there could have been a fair dismissal. The Employment Appeal Tribunal rejected this suggestion. A tribunal is obliged to consider reinstatement and re-engagement before going on to look at compensation. While certain factors which could lead to a deduction in compensation, such as misconduct by the employee, are relevant to the question of reinstatement, the employer’s own procedural failings were not of this nature, and the Tribunal was correct to look at reinstatement without taking them into account. Moreover the fact that Mr Eleftheriou had found a job was no bar to the Tribunal’s power to order reinstatement.

The EAT also held that the Tribunal had misread the provisions regarding compensation for loss between dismissal and reinstatement, and no percentage deduction should have been made. The employee was therefore entitled to full loss of earnings for his period of unemployment, and then the difference between his old and new salary up to the date of reinstatement.

Reinstatement seems likely to become an increasingly popular remedy for claimants, in a climate where the job market is tough and new jobs, where they can be found, are often at lower wages – even more so if the compensatory award is to be capped at a much lower level.

However, you might well share my view that an exercise by a tribunal to determine what percentage chance there is that there might have been a fair dismissal had correct procedures been followed is plainly unsatisfactory, not least because of the extent of conjecture if not plain speculation required. However, that is what the law requires in order to apply the principle set out in the very well known 1988 House of Lords case Polkey v A E Dayton Services Limited. Essentially, Polkey established that a dismissal can be unfair purely on procedural grounds, that an employee (other than in exceptional circumstances) has a right to consultation before dismissal and, relevant in this context, that a tribunal can reduce compensation in the case of a procedural unfair dismissal in proportion to the likelihood of dismissal having been fair if a correct procedure was followed. For employees who might be subject to a "Polkey deduction" there is yet more reason to request reinstatement.

While it may seem an odd outcome that someone who could have been dismissed fairly can nonetheless successfully claim reinstatement, that is what the law provides. As noted in the judgment:

Mr MacCabe [Counsel for Arriva] argues that the man on the Clapham omnibus – perhaps a curious phrase to adopt when his client is a North London bus company – would regard it as unjust for a man to be reinstated in employment where it was likely that he would have been fairly dismissed some months earlier.

However, since consideration of the fairness or otherwise of the dismissal must precede consideration of compensation and the claim for reinstatement interjects itself between the two, the logic of the approach is unimpeachable.