Zen Internet's Unfair Dismissal Appeal Partially Upheld
Zen Internet's appeal against an unfair dismissal ruling involving ex-CEO Paul Stobart has been partially upheld. The Tribunal's Polkey assessment was remitted.
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Zen Internet's Unfair Dismissal Appeal: What Happened?
The Employment Appeal Tribunal (EAT) has partially allowed an appeal by Zen Internet Limited in a case of unfair dismissal brought by their former Chief Executive Officer (CEO), Mr Paul Stobart. The original Employment Tribunal had ruled Mr Stobart's dismissal unfair, prompting Zen Internet to appeal.
Background of the Case
Mr Stobart served as CEO of Zen Internet from October 2018 until his dismissal on 31 March 2023. The Tribunal determined that the reason for the dismissal related to capability, specifically Mr. Stobart's ability to achieve profitability within the business. However, the initial tribunal found the dismissal procedurally unfair, citing Zen's failure to adhere to its own procedures, which mirrored the ACAS Code. These procedures would have required Zen to formally establish the facts, inform Mr Stobart of the issue, hold meetings for him to present his case, decide on the outcome, and offer an appeal.
The Appeal and the EAT's Decision
Zen Internet appealed the findings of unfairness and the subsequent 'Polkey' assessment, which determines the reduction in compensation due to the likelihood of dismissal even with a fair process.
The EAT dismissed Zen's appeal against the finding of unfair dismissal. While the EAT acknowledged that there isn't always a need to have explicit procedural steps like providing a warning before an employee can be fairly sacked for capability reasons, it determined the original tribunal had imposed no requirement of that nature. But focused on the established proceedure not being followed.
The Polkey Deduction: Remitted for Reconsideration
The EAT allowed Zen's appeal against the Polkey assessment. The Tribunal was found to have wrongly restricted its consideration to the period after 17 March 2023 and had failed to give suitable details for its conclusion that a fair dismissal would have taken place by 31 May 2023. This part of the case has been sent back for re-evaluation.
Key Takeaways for Employers
- Procedural Fairness Remains Paramount: Even for senior executives, following fair dismissal procedures, aligned with the ACAS Code, is crucial.
- Polkey Assessments Require Careful Consideration: Tribunals must provide clear and adequate reasons for their conclusions on when a fair dismissal might have occurred.
- Timeframes Matter: When evaluating the just timeframe, it must be considered that fair proceedures should be inacted as soon as issues are known.
Read the entire judgement here: Zen Internet Ltd v Mr Paul Stobart [2025] EAT 153
