What is a Section 278 Agreement?

A Section 278 Agreement is a legal agreement between a developer and a highway authority to carry out highway works.

Unfair Dismissal: Tribunal Wrong To Reduce Compensation By 100%

When an employee is found to have been unfairly dismissed, compensation usually has two parts:

a basic award, calculated in a similar way to statutory redundancy pay; and
a compensatory award, reflecting the employee’s past and future financial losses. This award is capped at the lower of one year’s salary or the statutory maximum (although this cap will be removed from 1^st January 2027).

Tribunals can reduce compensation where the employee’s own conduct is relevant. This is known as contributory fault. A basic award can be reduced where it is just and equitable to do so, even if the conduct did not directly cause the dismissal. A compensatory award can also be reduced, but only where the employee’s conduct actually caused or contributed to the dismissal.

These principles were considered by the Employment Appeal Tribunal (EAT) in Kesheva v Secure Frontline Services. Ms Kesheva, a door supervisor, left work mid-shift after an argument with a colleague. She was dismissed for gross misconduct without any investigation or proper procedure.

The employment tribunal found the dismissal was unfair but reduced both the basic and compensatory awards by 100%, on the basis that Ms Kesheva had committed gross misconduct by failing to contact her employer after leaving.

The EAT overturned that decision. Based on the tribunal’s own findings of fact, Ms Kesheva had informed her team leader that she was leaving, and there was no policy requiring her to make further contact by phone. Even if there had been, her actions would not have amounted to gross misconduct. The EAT ruled that a 100% reduction was not justified and sent the case back to a new tribunal to reconsider compensation.

Key takeaway

Even where an employee has behaved poorly, tribunals must assess contributory fault carefully and proportionately.

About Jon Dunkley

Jon Dunkley is a Partner at Wollens and heads up the firm’s Regulatory Department. Based at our North Devon office, Jon is a highly experienced solicitor with a broad commercial and regulatory practice, supporting businesses, professionals and senior employees across a wide range of legal issues.