Unfair dismissal remedies: All termination payments deducted before "Polkey reduction"

In Digital Equipment Co Ltd v Clements (No.2) [1997] IRLR 140, the EAT holds that, in calculating the compensatory award for unfair dismissal, any termination payment the employee received from the employer should be deducted from his or her loss caused by the dismissal before reducing that net loss by the percentage chance, if any, that he or she would have been retained had the employer acted fairly. The EAT also disagrees with a number of previous decisions as to how payments received by an employee are to be treated whenever there is to be a proportionate reduction in the award.