Mitigation of loss

Cooper Contracting Ltd v Lindsey

The Employment Appeal Tribunal (“EAT”) has summarised the main principles in decisions on mitigation of loss in this case. An employee is under a duty to mitigate their loss if unfairly dismissed by looking for new employment as soon as is reasonably possible. The Claimant carpenter was found unfairly dismissed and awarded losses on the basis he was entitled to have commenced true self-employment post dismissal but there were better paid employed opportunities "out there". The Respondent argued in their appeal that the Claimant had not reasonably mitigated his loss between dismissal and the hearing. Dismissing the appeal, the EAT summarised the legal approach to mitigation: 

  • The burden of proof is on the wrongdoer, the Respondent, and not the Claimant. So, without the Respondent submitting mitigation evidence, the employment tribunal has no obligation to make a finding;
  • The Claimant must be shown to have acted 'unreasonably', not necessarily 'not reasonably';
  • Determination of unreasonableness is a question of fact, taking account of the Claimant's views and wishes;
  • The employment tribunal should not put Claimants on trial as if losses were their fault;
  • Failure to take better paid jobs does not necessarily mean a Claimant has failed to mitigate their loss.

In Practice

The duty on a Claimant to mitigate their loss has always been a low one, with it being relatively easy for them to satisfy it. However, many employers have wrongly thought that it is down to the Claimant to show they have done so. Kate Fretten Employment Partner comments, "This decision confirms that is not the case. It is for the Respondent to show the Claimant has been unreasonable and we therefore advise employers facing unfair dismissal claims that they start obtaining evidence of jobs the dismissed employee could apply for at the earliest opportunity."

Our Employment Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Kate or a member of the team will be happy to discuss any questions that you may have.