Contributory Fault Reduction in Employment Tribunal Claims

A contributory fault reduction is a mechanism used by Employment Tribunals to reduce compensation where an employee's own conduct contributed to their dismissal or the situation giving rise to the claim.

It is most commonly applied in unfair dismissal cases and operates under the Employment Rights Act 1996. The tribunal does not remove liability entirely but instead reduces the compensatory award to reflect the claimant's responsibility for their own loss.

This principle ensures that compensation is fair and proportionate, reflecting both employer wrongdoing and employee conduct.

What Is Contributory Fault Reduction?

A contributory fault reduction is a percentage decrease applied to an Employment Tribunal compensation award where the claimant is found to have contributed to their dismissal or loss through blameworthy conduct.

In practical terms:

• The tribunal finds the dismissal or treatment was unfair or unlawful
• The claimant's conduct is also found to have contributed to the situation
• Compensation is reduced accordingly

This reduction applies mainly to the compensatory award in unfair dismissal claims but can also arise in other tribunal claims where statutory provisions allow it.

Legal Basis for Contributory Fault

The legal framework for contributory fault reduction is primarily found in:

• Employment Rights Act 1996 (unfair dismissal compensation provisions)
• Case law interpreting “just and equitable” reductions
• Tribunal discretion under compensation assessment rules

The key statutory principle is that tribunals may reduce compensation if they consider the employee's conduct before dismissal was such that it would be “just and equitable” to do so.

When Does Contributory Fault Apply?

A contributory fault reduction is typically considered where the employee's conduct has:

• Contributed to misconduct allegations
• Contributed to breakdown in trust and confidence
• Played a role in disciplinary action or dismissal
• Involved negligence or blameworthy behaviour

Common examples include:

• Minor misconduct alongside employer procedural failings
• Insubordination or refusal to follow instructions
• Poor performance with an element of employee responsibility
• Behaviour contributing to workplace conflict
• Failure to comply with policies or procedures

Importantly, not all employee mistakes lead to contributory fault. The conduct must be sufficiently blameworthy.

How Tribunals Decide the Reduction

Employment Tribunals apply a discretionary and fact-specific approach. They consider whether it is fair to reduce compensation and, if so, by how much.

Key factors include:

1. Nature of the conduct

• Was the behaviour intentional or negligent?
• Was it serious or minor?
• Did it breach clear workplace rules?

2. Degree of responsibility

• How much did the employee contribute to the dismissal?
• Was the employer primarily at fault?

3. Causal link

• Did the conduct directly contribute to the dismissal?
• Or was it only indirectly relevant?

4. Fairness and proportionality

Tribunals must ensure the reduction is just and equitable in all circumstances.

How Contributory Fault Affects Compensation

Contributory fault reduces the compensatory award in Employment Tribunal claims.

It does not affect:

• The finding of unfair dismissal or liability
• The basic award in unfair dismissal claims
• Discrimination injury to feelings awards (except in limited overlapping scenarios involving conduct adjustments)

The reduction is usually expressed as a percentage, such as:

• 10% reduction for minor contributory conduct
• 25–50% reduction for moderate responsibility
• Higher reductions in more serious cases

Contributory Fault vs Polkey Reduction

Contributory fault is often confused with Polkey reduction, but they are distinct.

Contributory Fault Reduction

• Focuses on employee conduct
• Assesses blameworthiness
• Reduces compensation based on contribution to dismissal

Polkey Reduction

• Focuses on hypothetical outcome
• Considers whether dismissal would have happened anyway
• Based on procedural fairness analysis

Both can apply in the same case, and tribunals may apply both reductions sequentially.

Examples of Contributory Fault in Practice

Example 1: Misconduct with procedural unfairness

An employee is dismissed without a proper disciplinary hearing but was found to have engaged in misconduct.

• Tribunal finds unfair dismissal due to procedure
• Employee contributed through misconduct
• Compensation reduced by 30%

Example 2: Poor performance with partial employer fault

An employee is dismissed for performance issues but the employer failed to provide adequate training.

• Employer partly responsible
• Employee also failed to meet reasonable standards
• Smaller reduction applied (e.g. 10–20%)

Example 3: Serious misconduct

An employee engages in serious misconduct but dismissal procedure is flawed.

• High contributory responsibility
• Tribunal may apply substantial reduction (e.g. 50% or more)

Evidence Used in Assessing Contributory Fault

Tribunals rely on a wide range of evidence, including:

• Disciplinary records
• Witness statements
• Emails and internal communications
• Performance reviews
• Company policies
• Investigation reports

The tribunal assesses conduct in context, not in isolation.

Legal Threshold for Contributory Fault

The key legal requirement is that the employee's conduct must be:

• Blameworthy or culpable
• Connected to the dismissal or loss
• Sufficient to make a reduction “just and equitable”

Simple dissatisfaction with performance or minor mistakes are usually insufficient.

Interaction with Other Compensation Adjustments

Contributory fault is one of several adjustments tribunals may apply, alongside:

1. Polkey reduction

For hypothetical fair dismissal outcome

2. Mitigation of loss

Deduction of post-dismissal earnings

3. ACAS uplift or reduction

Adjustment for failure to follow the ACAS Code of Practice (up to 25%)

Tribunals may apply multiple adjustments, which can significantly affect final awards.

Time Limits and Procedural Context

Contributory fault is not a standalone claim but a calculation principle applied within tribunal proceedings.

However, underlying claims must usually be brought within:

• 3 months less one day from the act complained of

The issue of contributory fault is typically addressed during the remedy stage of proceedings, after liability has been established.

Common Misconceptions

“Any mistake leads to reduced compensation”

Incorrect. Only blameworthy conduct that materially contributes to dismissal can justify a reduction.

“It cancels unfair dismissal findings”

Incorrect. Liability remains even if contributory fault applies.

“Employer misconduct removes contributory fault”

Incorrect. Both parties can share responsibility.

Practical Importance in Tribunal Claims

Contributory fault is a key issue in:

• Disciplinary dismissal disputes
• Performance management cases
• Workplace conflict situations
• Misconduct allegations

It often becomes central during remedy hearings, where financial compensation is calculated.

Key Takeaways

Contributory fault reduction in Employment Tribunal claims allows compensation to be reduced where an employee's own conduct contributed to their dismissal or loss. It is a discretionary principle applied under the Employment Rights Act 1996 and depends on whether it is just and equitable to reduce the award.

The reduction is typically expressed as a percentage and focuses on blameworthy conduct, causal connection, and overall fairness. It is separate from Polkey reductions and can be applied alongside other adjustments such as mitigation and ACAS uplifts.