Unfair redundancy dismissal but no compensation due to gross misconduct
A former employee won an unfair dismissal claim for redundancy but received no compensation because the tribunal found he would have been fairly dismissed for gross misconduct anyway.
1 min read · Last updated 18 May 2026
Case details
- #redundancy
- #polkey-deduction
- #gross-misconduct
- #no-compensatory-award
- #unauthorised-access
Key facts
- The claimant was dismissed for redundancy.
- The dismissal was procedurally unfair.
- The claimant had downloaded confidential audio recordings without authorisation.
- The respondent proved the claimant would have been fairly dismissed for gross misconduct by the effective date of termination.
- The claimant received a statutory redundancy payment equal to the basic award.
- No compensatory award was made because the claimant would have been dismissed for misconduct in any event.
Timeline
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Suspension letter
The claimant was suspended and informed of a disciplinary investigation into unauthorised access to confidential audio recordings.
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Police report
The respondent reported the claimant's misconduct to the police.
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CPS decision
The Crown Prosecution Service decided not to prosecute the claimant due to insufficient public interest.
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Hearing day 1
First day of the employment tribunal hearing.
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Hearing day 2
Second day of the employment tribunal hearing.
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Judgment on liability
The tribunal found the dismissal unfair but indicated a Polkey deduction would be considered.
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Remedy judgment
The tribunal decided no compensatory award because the claimant would have been fairly dismissed for gross misconduct.
The legal issue
The tribunal had to decide whether an employee who was unfairly dismissed for redundancy should receive compensation, given that the employer could have fairly dismissed him for gross misconduct instead.
The outcome
The tribunal found that the dismissal for redundancy was procedurally unfair, so the claim succeeded. However, the employer proved that the employee had downloaded confidential audio recordings without authorisation, which amounted to gross misconduct. The tribunal applied a 100% Polkey deduction, meaning no compensatory award was made because the employee would have been fairly dismissed for misconduct by the effective date of termination.
- Basic award: £0 (already received as statutory redundancy payment)
- Compensatory award: £0 (full Polkey deduction)
- Total damages: £0
Lessons & takeaways
- Even if a dismissal is unfair, compensation can be reduced to zero if the employer shows the employee would have been fairly dismissed for another reason.
- Gross misconduct discovered after dismissal can still be used to argue that no compensation should be paid.
- Employers should follow a fair redundancy process, but a procedural failure may not result in a payout if the employee's own conduct is serious enough.
This case shows that winning an unfair dismissal claim does not always mean receiving compensation. The former employee was dismissed for redundancy, but the tribunal found the process was unfair. However, the employer had also started disciplinary proceedings for unauthorised access to confidential audio recordings. The tribunal decided that, even if the redundancy had been handled properly, the employee would have been fairly dismissed for gross misconduct anyway.
What the employer could have done differently
The employer could have followed a fair redundancy process, including proper consultation and objective selection criteria. Instead, the procedural flaws led to a finding of unfair dismissal. However, the employer's decision to pursue the misconduct allegation and report it to the police ultimately protected it from a compensation payout.
Why this matters for similar claims
Employees who have committed serious misconduct should not expect a large payout even if their dismissal was procedurally unfair. Employers should document misconduct thoroughly and be prepared to show that a fair dismissal would have occurred regardless of the redundancy. The 100% Polkey deduction here reflects the tribunal's view that the outcome would have been the same — dismissal for gross misconduct.
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