Davidson v National Express: EAT remits future loss calculation after unfair dismissal finding

In Davidson v National Express Limited [2025] EAT 151, the Employment Appeal Tribunal has provided important guidance on calculating future loss in unfair dismissal cases, particularly where claimants intend to work beyond traditional retirement age.

Ms Davidson, a coach driver employed at Stansted Airport since 2016, was summarily dismissed after failing three consecutive alcohol breath tests upon arriving at work in June 2021. The tests showed readings of 13mg, 10mg and 8mg per 100ml respectively - the final reading matching National Express's threshold for unacceptable alcohol levels, significantly below the national drink-driving limit of 35mg.

The employment tribunal found the dismissal unfair solely because the appeal process was flawed, with the appeals manager failing to fully consider Davidson's grounds of appeal. The wrongful dismissal claim failed. The tribunal applied a 75% Polkey reduction and a 75% contributory conduct reduction to both basic and compensatory awards, whilst adding a 10% ACAS Code uplift for the employer's procedural failings during the appeal.

The central issue on appeal concerned the tribunal's decision to limit compensation to Davidson's 65th birthday, despite her evidence that financial commitments necessitated working until age 70. Davidson was 61 at dismissal and 63 at the tribunal hearing. She had secured alternative employment at Flagfinders shortly after dismissal, albeit at a lower rate of pay.

HHJ Auerbach identified fundamental flaws in the tribunal's approach to assessing future loss. The tribunal had justified limiting compensation to age 65 partly because it could not account for potential pay increases at Flagfinders beyond 2025, reasoning that Davidson would therefore "have the benefit of the respondent's pay rises, whether or not her ongoing earnings increase or decrease."

This reasoning was criticised for conflating two distinct considerations without any principled basis for concluding that age 65 struck the appropriate balance. The tribunal appeared influenced by the "considerable" length of the award period rather than conducting a proper assessment of likely future loss.

The EAT emphasised that section 123(1) of the Employment Rights Act 1996 requires tribunals to evaluate actual loss sustained "in consequence of the dismissal" rather than simply determining what seems just and equitable. Whilst acknowledging the inherent uncertainty in predicting future events, tribunals must "grapple with" imponderables rather than avoiding them.

Drawing on Software 2000 Ltd v Andrews and Contract Bottling Ltd v Cave, the judgement reinforced that speculation inherent in future loss calculations does not justify refusing to engage with available evidence. Tribunals must consider all material that might assist in fixing just compensation, including evaluating a claimant's stated intentions about continuing work, whilst recognising that circumstances may change.

The tribunal had failed to meaningfully assess variables affecting Davidson's ability to work until 70, including health contingencies and changing personal circumstances. Instead, it relied on an "overall feel" that limiting compensation to age 65 was appropriate, without conducting the principled assessment required by statute.

The compensation calculation was remitted to the same tribunal for fresh consideration, with opportunity to update evidence regarding Davidson's actual earnings and current employment position. The Polkey and contributory conduct reductions of 75% each remained undisturbed, as did the dismissal of the wrongful dismissal claim.

This judgement reinforces that tribunals must undertake reasoned assessments of future loss based on evidence, even where outcomes are uncertain, rather than applying arbitrary cut-off points based on traditional retirement ages.