Polkey reduction

Also known as Polkey deduction after the House of Lords decision in Polkey v AE Dayton Services Ltd [1987] IRLR 503. A reduction in the compensatory award made to an employee in a successful claim for unfair dismissal to reflect the chance that there would have been a fair dismissal in any event. It may be expressed as a percentage reduction (up to 100% in some cases) or as a cap on future loss. In Polkey, the compensatory award was reduced to reflect the fact that certain procedural steps that had not been taken by the employer in implementing a redundancy dismissal would not have made a difference to the decision to dismiss. Although Polkey concerned procedural unfairness, Polkey deductions can also be made in cases where dismissal is substantively unfair, for example, if dismissal for a different (fair) reason would have occurred anyway at a later date (see for example Gover and others v Propertycare Ltd [2006] EWCA Civ 286).