Employment Appeal Tribunal Upholds Unfair Dismissal Finding in Fargro v Hide but Remits Polkey Reduction for Reconsideration

The Employment Appeal Tribunal (EAT) handed down judgment in Fargro Ltd v David Hide ([2026] EAT 162) on 21 October 2026, deciding a combined appeal and cross-appeal arising from an unfair dismissal claim. The underlying facts concerned a misconduct dismissal in which Fargro had engaged external consultants to conduct the investigation and disciplinary and appeal hearings. Those consultants reported to a single manager who made both the dismissal decision and the appeal decision. The employment judge found the dismissal unfair on the basis that having the same decision-maker for both dismissal and appeal was procedurally unfair, but found no unfairness in the process being conducted by external consultants. The employment judge applied a Polkey reduction (a legal mechanism, named after the House of Lords case Polkey v AE Dayton Services Ltd, that reduces a claimant's compensation to reflect the chance that a fair process would have led to the same outcome anyway) of 66.66%. On Fargro's appeal: the EAT dismissed the employer's argument that the employment judge had erred in not making a finding of contributory fault, holding that the judge was entitled to decline where he could not identify evidence enabling him to make the necessary findings of fact on the claimant's culpability. On the claimant's cross-appeal: the EAT partly allowed it, finding that the employment judge had failed to make findings on material submissions about further reasons why the dismissal was unfair, including whether the claimant had a proper opportunity to explain himself to the decision-maker who never met him before dismissing. The EAT held that while the employment judge's conclusions on the issues he did address were not perverse, the Polkey reduction would need to be revisited if additional bases for unfairness were established. (instructed by ) appeared for Fargro, and (instructed by ) appeared for the claimant.