Would you still have dismissed? The limits of Polkey in capability cases
Would you still have dismissed? The limits of Polkey in capability cases
You run a high-performance culture. You spot a manager who has not moved up, you move them out. You miss parts of your process. If a Tribunal calls the dismissal unfair, can it wipe out compensation with a 100% Polkey reduction, because you would have dismissed anyway?
Not in Pal v Accenture.
What happened?
Accenture employed Ms Pal for around a decade and promoted her to Manager. It operated a progression-based performance model, sometimes described as ‘up or out’, which linked continued employment to readiness for promotion within expected timeframes.
Ms Pal had endometriosis, a condition where tissue like the lining of the uterus grows outside the uterus, causing pain, inflammation, and sometimes fertility problems. She took sick leave and a phased return after surgery. Accenture dismissed her in 2019 for capability reasons tied to its model. She appealed internally. They did not refer her to Occupational Health, and the appeal did not investigate her condition further.
The Employment Tribunal found the dismissal unfair on procedural grounds but reduced the compensation by 100%. It also rejected her disability case.
What did the EAT decide?
The Employment Appeal Tribunal (EAT) overturned the Tribunal’s 100% Polkey reduction and criticised the Tribunal’s approach to the ‘what would have happened if we had done it properly?’ exercise.
On disability, the EAT held that the Tribunal’s analysis of whether endometriosis amounted to a disability should not stand. It sent the case back to a differently constituted Tribunal to reconsider key issues afresh, including disability discrimination and compensation questions.
Why did it reach that decision?
A Polkey reduction allows a Tribunal to reduce compensation to reflect the chance that a fair process would still have led to dismissal. It is a predictive, evidence-based assessment.
The Tribunal went wrong by effectively creating an imaginary process and then treating it as inevitable. It had assumed that Accenture would have introduced a new policy mirroring the process it had actually used, instead of analysing whether Accenture would have fairly dismissed had it complied with its existing policy. This required consideration of whether Accenture would have applied its progression-based performance model.
This matters even more in progression-based models. The EAT stressed that Tribunals must anchor capability in ‘the work of the kind’ the employee was employed to do, not a future role by default.
On disability, the EAT did not declare that endometriosis always equals disability. It said the Tribunal did not properly apply the statutory test, including in assessing the substantial and long-term effects and whether the condition would have a substantial adverse effect without treatment.
What should you do?
- Use Polkey to mitigate any damage, not as a safety net. If you cut corners, you hand the claimant an argument that a fair process could have changed the timing, decision-maker, adjustments, or outcome. Keep evidence that supports your ‘would have dismissed anyway’ position, if you plan to run it.
- Separate ‘job performance’ from ‘promotion readiness’, in writing. If you use an up-or-out model, document how you assess performance in the current role and why continued employment depends on progression. Otherwise, you invite a capability category error.
- Build health into capability governance. When absence, pain, fatigue, or recovery are present, engage Occupational Health. Consider adjustments, and record what you knew, when, what you did, and why.
