Unfair redundancy at BT: 75% Polkey cut and lost share scheme compensation
A former BT employee was unfairly dismissed in a redundancy process. The tribunal awarded £52,173.45 after applying a 75% Polkey reduction and compensating for lost share scheme benefits.
2 min read · Last updated 18 May 2026
Case details
- #redundancy
- #polkey-deduction
- #share-scheme-loss
- #grossing-up
- #reconsideration
Key facts
- The claimant was employed by BT and dismissed by reason of redundancy.
- The tribunal found the dismissal was unfair.
- A Polkey deduction of 75% was applied to the compensatory award.
- The claimant participated in share save schemes which were lost upon dismissal.
- The remedy judgment was amended on reconsideration to correct JSA double deduction and grossing up error.
Timeline
-
Dismissal date
The claimant was dismissed by BT, effective from this date.
-
Liability hearing day 1
Employment Tribunal hearing on liability for unfair dismissal.
-
Liability hearing day 2 and judgment
Tribunal found unfair dismissal and ordered remedy hearing.
-
Remedy hearing
Tribunal assessed compensation and issued remedy judgment awarding £45,767.78.
-
Reconsideration application
Claimant applied for reconsideration of remedy judgment.
-
Reconsideration decision
Tribunal allowed reconsideration and amended award to £52,173.45.
The legal issue
Whether the employee was unfairly dismissed by reason of redundancy and what compensation should be awarded, including the application of a Polkey reduction and the correct calculation of losses from share schemes.
The outcome
The tribunal decided the employee was unfairly dismissed. The key reason was that BT's redundancy process was flawed. However, the tribunal applied a 75% Polkey reduction, meaning it found there was a 75% chance the employee would have been dismissed even with a fair process.
Compensation breakdown:
- Basic award: £16,320.00
- Compensatory award (after Polkey reduction and grossing up): £29,447.78
- Total award: £45,767.78 (later amended to £52,173.45 on reconsideration)
The reconsideration corrected a double deduction for Jobseeker's Allowance and a grossing-up error, increasing the total to £52,173.45.
Lessons & takeaways
- If you lose share scheme benefits due to dismissal, you can claim for their loss, but the tribunal will assess them speculatively based on current share prices.
- A Polkey deduction can significantly reduce your compensation if the tribunal thinks you would have been dismissed anyway in a fair process.
- Check the remedy calculation carefully; errors like double deductions or incorrect grossing-up can be corrected on reconsideration.
- You have only 14 days to apply for reconsideration of a tribunal judgment, but the tribunal can extend time in exceptional circumstances.
This case shows how a flawed redundancy process can lead to a finding of unfair dismissal, but also how a Polkey reduction can dramatically cut the compensation. The employee, who had worked for BT for many years, was selected for redundancy in a process that the tribunal found to be unfair. However, the tribunal also concluded that there was a 75% chance that the employee would have been dismissed anyway if a fair procedure had been followed. This meant the compensatory award was reduced by 75%.
The share scheme complication
A notable feature of this case was the claim for losses from three share schemes: a Save As You Earn (SAYE) scheme, a Direct Save scheme, and a You Shares scheme. The employee had been paying into these schemes and lost the opportunity to benefit from them upon dismissal. The tribunal had to assess the value of these losses, which involved speculative calculations based on current share prices. For example, for the 2020 SAYE scheme, the tribunal calculated a loss of £8,121.50 based on the difference between the option price and the current share price.
The reconsideration
After the initial remedy judgment, the employee applied for reconsideration, pointing out two errors: a double deduction of Jobseeker's Allowance and a mistake in the grossing-up calculation. The tribunal allowed the reconsideration and amended the award from £45,767.78 to £52,173.45. This highlights the importance of checking the tribunal's calculations carefully and acting quickly if there is an error.
What this means for similar claims
For employees in similar situations, this case demonstrates that even if a redundancy dismissal is unfair, the compensation may be heavily reduced if the employer can show a fair process would have likely led to the same result. It also shows that losses from share schemes can be claimed, but the tribunal will assess them on a speculative basis. Finally, the reconsideration process is available to correct clear errors, but the strict 14-day time limit means prompt action is essential.
Similar cases
Café manager with 17 years' service unfairly dismissed after redundancy and missed vacancy
A café manager with 17 years' service was unfairly dismissed when her employer failed to inform her of a sales assistant vacancy during redundancy consultation. The tribunal awarded £560.28 after applying a 66.7% Polkey reduction.
Unfair redundancy dismissal: 75% Polkey reduction for asbestos supervisor
An asbestos supervisor unfairly dismissed for redundancy was awarded £3,298 after a 75% Polkey reduction. The tribunal found the dismissal unfair but applied a large reduction for the chance of fair dismissal.
Chef with 35 years' service dismissed without consultation when restaurant closed
A chef who worked for 35 years was made redundant without any consultation or notice when his restaurant closed. The tribunal awarded £17,766 in redundancy and notice pay, but reduced compensation for unfair dismissal by 100% because the business was bound to close.
Solicitor made redundant without proper consideration of alternative role at sister firm
A housing solicitor was unfairly dismissed when her employer failed to properly consider a possible secondment at a sister firm. The tribunal found a 85% chance that consultation would have led to an alternative role.