Employment Law Digest October 2026: Case law update

Procedural unfair dismissals and contributory conduct

In M Jarosinski v Nestle UK Limited:

• Mr Jarosinski was employed by Nestle and dismissed following a breakdown in the employment relationship caused by his ongoing hostility towards managers and refusal to accept management decisions.
• He brought claims before the Employment Tribunal (ET) including for race discrimination and unfair dismissal.
• The ET found that through his behaviour, Mr Jarosinksi had made the working relationship untenable and that whilst Nestle had taken considerable steps to try and repair the relationship, Mr Jarosinksi had refused to build bridges or put the past behind him. Instead, he maintained his position that he was right and refused to compromise. Nestle had to take account not just of Mr Jarosinksi’s position, but also that of his managers, one of whom Mr Jarosinksi had accused of being a “two-faced snake” and the other, a “sociopathic bully”, phrases which Mr Jarosinksi stood by in his evidence to the ET.
• In the circumstances, the ET found that there had been a fundamental and irretrievable breakdown in the working relationship and in trust and confidence. The reason for the dismissal was found to be “some other substantial reason” and Nestle had proved that was a fair reason for the dismissal.
• However, although the ACAS Code of Practice on Discipline and Grievance does not apply to dismissals for some other substantial reason, Nestle was not absolved of following a fair procedure. Accordingly, Mr Jarosinksi should have been told that Nestle was considering dismissing him in advance of meeting with him, thus enabling him to prepare and make submissions at the meeting, at which he was dismissed.
• The ET dismissed his discrimination claims but the dismissal was found to be unfair on procedural grounds.
• The ET also found that Mr Jarosinksi was unrepentant in his views about his managers and the way in which he perceived he had been treated and the ET concluded that he would not have departed from them at a formal dismissal meeting, had one been properly convened.
• Having found that Mr Jarosinksi had been unfairly dismissed on procedural grounds only, the ET made no compensatory or basic award on the basis that he had contributed 100% to his dismissal through his conduct and there was a 100% chance that he would have been dismissed had a fair procedure been followed (Polkey reduction).

The Employment Appeal Tribunal dismissed Mr Jarosinski’s appeal. It found that:

• The ET had identified “culpable and blameworthy conduct” and found that this was the cause of the dismissal. It was clear that the ET regarded the 100% reduction as being just and equitable in all the circumstances and the ET had provided reasons for its conclusions.
• The 100% Polkey reduction was also a decision that the ET was entitled to reach and it had answered the correct question, namely, “if there had been a fair procedure would the result still have been a dismissal?” The reason for the 100% Polkey reduction was satisfactorily explained by the ET.
• Making a 100% Polkey deduction on the basis that, had there been a fair procedure, the result would still have been a dismissal because Mr Jarosinski would not have said or done anything differently, given his earlier and subsequent conduct is not the same as making a 100% deduction for the contributory misconduct itself. There was no element of “double counting” in the ET doing this.

The case illustrates that procedural unfairness does not automatically result in compensation. However, a 100% reduction in compensation is unusual and so the case also highlights the importance of employers getting the procedure right, as doing so would have avoided any unfair dismissal finding against Nestle in the first place.

Aggravated damages

In Khans Solicitors v Kaiser:

• The respondent is a firm of solicitors and the claimant worked there as a paralegal.
• Before an Employment Tribunal (ET), the claimant succeeded with claims for disability discrimination, sex related harassment and automatic unfair dismissal for asserting a statutory right.
• The ET awarded the claimant compensation of £109,020.64, which included injury to feelings of £25,000 and aggravated damages of £5,000.

The respondent was permitted to appeal against two aspects on the remedy judgment, including the award for aggravated damages.

The Employment Appeal Tribunal recapped the requirements for aggravated damages:

• The circumstances where aggravated damages may be awarded are limited because it is necessary that there be an additional aggravating factor, that go beyond those already compensated for by an award for injury to feelings; and that the additional aggravating factor has caused increased injury to that already compensated for by an award of injury to feelings.
• Case law has previously set out 3 key points:
  • Aggravated damages are compensatory in nature and not punitive.
  • The features that may attract an aggravated damages award can be classified under three heads—(a) the manner in which the defendant has committed the tort; (b) the motive for it; and (c) the defendant’s conduct subsequent to the tort but in relation to it.
  • The features above affect the award of compensation because they aggravate the distress caused by the actual wrongful act.
• The ET did not adequately explain why it made an award of aggravated damages.
• The ET found that the “most serious aggravating factor here is that the discriminator is a firm of solicitors” which appeared to be no more than the ET expressing its displeasure that a firm of solicitors should have treated an employee so badly. The EAT found that this appeared to be punitive, which is not a permissible basis to award aggravated damages. Further, the ET had found that the claimant’s complaints were treated “in a trivial way” but did not clearly identify how.
• This issue (and another minor part of the remedy judgment) was sent back to the ET to redetermine whether an award for aggravated damages should be made and, if so, how much.

Defending equal pay claims

In Next Retail Limited v M Thandi and others:

• Claims were brought by 3,540 retail sales consultants working in Next’s shops under equal pay provisions.
• They complained they were paid less than the comparators, all of whom were warehouse operatives where goods are processed and sent to stores for sale or to customers who made purchases online.
• Over the relevant period, 77.5% of retail consultants were female and 22.5% were male whilst in the warehouse, an average of 47.22% of warehouse operatives were female and 52.78% male.
• The Employment Tribunal (ET) found that the work of the sales consultants was of equal value to the comparator warehouse operatives.
• The ET considered 20 distinct contractual pay terms or categories between the claimants and comparators. The most important was basic pay with the others being various entitlements including certain bonuses and premiums.
• Next relied on six material factors to explain the difference in respect of several contractual terms, including basic pay:
  • Market forces and market price, which the ET found to mean, in essence, “paying the going rate”.
  • Recruiting and retaining sufficient warehouse labour.
  • Maintaining 24/7 work in the warehouse, including night shifts, overtime, Sundays and public holidays.
  • Incentivising high productivity within the warehouse, generally and during peak periods of demand.
  • Incentivising consistent and high attendance in the warehouse, in particular during peak periods of demand.
  • Business viability, resilience and performance of the Next Group and subsidiaries.
• Having found that the basic pay of the comparators was higher than that of the claimants, the ET found that there were specific pressures in the market for warehouse operatives, particularly in recruitment, which did not arise in the marketplace for sales consultants. However, the ET concluded that the business need was not sufficient to overcome the discriminatory effect of lower basic pay, especially considering the ‘financial headroom’ it had to absorb the cost of paying the claimants the same basic pay for work of equal value.
• The ET decided that Next’s defence failed in respect of basic pay and six other terms. In the case of four of the terms, it decided that there was no difference in pay and Next’s defence succeeded in respect of the other nine terms.

Next appealed and the Employment Appeal Tribunal allowed part of their appeal, finding that:

• The ET should have found that Next pursued a legitimate aim on the basis that the warehouse operatives’ higher pay was based on a rationale which did not apply to the retail sales consultants.
• On the ET’s findings of fact, Next needed to pay the higher market rate for warehouse work, not because of gender but because of recruitment and retention factors. That rationale did not apply to the retail workers. So, whilst it might be said that the employer’s aim in not evening up the pay of the disadvantaged group was to save the cost of having to do so, “that was not the whole story”. There were sound business reasons for the rates paid to warehouse staff and the pay differential was a proportionate means of achieving a legitimate aim.
• The reference by the ET to “financial headroom” suggested that it was considering the affordability of equalising the pay, which was wrong. It should have been assessing the reason for the difference in pay.

Next’s appeal succeeded on basic pay and certain other pay elements. The ET’s decision in favour of the retail sales consultants on other elements, including on paid rest breaks, and overtime premiums was not overturned.

The case is helpful for employers, confirming that genuine market, recruitment and retention pressures can justify a pay differential. The ability of employers to produce evidence to support those arguments will always be crucial to defend claims.