Unfair dismissal but 100% Polkey reduction due to workplace closure
A former employee was unfairly dismissed but received only limited compensation because the tribunal found he would have been fairly dismissed a month later when the workplace closed. Total award: £12,419.29.
1 min read · Last updated 19 May 2026
Case details
Key facts
- The claimant was dismissed on 21 June 2023.
- The respondent's place of work closed on 31 July 2023.
- There was a 100% chance the claimant would have been fairly dismissed by 31 July 2023 due to the closure.
- The claimant had accrued but untaken holiday of 81.2 hours.
- The claimant's weekly pay was £250.
- The respondent failed to pay the claimant for accrued holiday and notice pay.
Timeline
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Dismissal
The claimant was unfairly dismissed by the respondent.
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Place of work closure
The respondent's place of work closed, which would have led to a fair dismissal.
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Hearing day 1
Employment tribunal hearing commenced via video.
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Hearing day 2 and judgment
Tribunal concluded hearing and issued judgment finding unfair dismissal but with 100% Polkey reduction.
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Reconsideration judgment
Tribunal issued a reconsideration judgment adding a breach of contract claim for notice pay.
The legal issue
The tribunal had to decide whether the employee was unfairly dismissed, and if so, whether compensation should be reduced because a fair dismissal was inevitable due to the closure of the workplace.
The outcome
The tribunal found the employee was unfairly dismissed on 21 June 2023. However, because the workplace closed on 31 July 2023, there was a 100% chance he would have been fairly dismissed by that date. This meant the compensatory award was limited to the period between dismissal and the closure.
The employee also succeeded in claims for unpaid holiday pay and breach of contract for notice pay. A claim for sick pay was dismissed, and the tribunal had no jurisdiction over a loan repayment claim.
Compensation breakdown:
- Basic award: £7,500.00
- Compensatory award: £1,465.00 (5.86 weeks at £250/week)
- Holiday pay: £454.29 (81.2 hours)
- Notice pay: £3,000.00
- Total: £12,419.29
Lessons & takeaways
- If your workplace is closing, a dismissal may still be unfair if the process is flawed, but compensation can be heavily reduced if a fair dismissal was inevitable.
- Polkey reductions can be 100% if the tribunal is satisfied that the employee would have been dismissed fairly in any event, even if the actual process was unfair.
- Employers must pay accrued but untaken holiday on termination, even if they dispute the dismissal.
- Employees can claim notice pay as a breach of contract in the tribunal, but must ensure the claim is included in the initial proceedings.
- Tribunals cannot decide loan repayment disputes between employer and employee; those must be pursued in civil court.
A dismissal that was unfair in form, but inevitable in substance
This case illustrates how a procedural flaw in a dismissal does not always lead to substantial compensation. The former employee was dismissed on 21 June 2023, but the employer's workplace was due to close permanently on 31 July 2023. The tribunal found the dismissal unfair, but concluded that even with a fair process, the employee would have been dismissed by the closure date. This led to a 100% Polkey reduction, meaning the compensatory award covered only the five weeks between dismissal and the closure.
What the employer could have done differently
The employer did not attend the hearing and was not represented. Had they engaged, they might have avoided the unfair dismissal finding altogether by following a proper redundancy process. However, the outcome shows that even without a fair process, the compensation was limited because the closure made redundancy inevitable. The employer also failed to pay holiday pay and notice pay, which added to the total award.
Why this matters for similar claims
For employees, this case is a reminder that an unfair dismissal finding does not guarantee a large payout. If the employer can show that a fair dismissal was inevitable—for example, due to redundancy, capability, or conduct that would have led to dismissal anyway—the tribunal can reduce compensation significantly. For employers, it highlights the importance of following a fair process, but also that a genuine business closure can limit liability. The case also confirms that tribunals can award notice pay as a breach of contract, and that holiday pay must be paid on termination.
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