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When defending tribunal claims, employers need to gather relevant evidence and prepare arguments about the employee’s efforts to mitigate their loss. Charles Wynn Evans argues this is an essential and easily overlooked aspect of preparation for a tribunal case.
Whether negotiating severance terms, settling a tribunal claim ahead of a hearing, or addressing the issue of the compensation which a tribunal should award in relation to a successful employment claim (such as for unfair dismissal or unlawful discrimination), employers need to consider carefully and not lose sight of the issue of mitigation of loss.
The case of Cooper Contracting v Lindsey
The recent Employment Appeal Tribunal (EAT) case of Cooper Contracting Ltd v Lindsey reiterates the principles which the employment tribunal must apply when considering mitigation.
In this case an employer appealed against the award of compensation made by an employment tribunal to a carpenter who had successfully claimed unfair dismissal.
The tribunal accepted that it was legitimate for the claimant employee to mitigate his loss by taking up self employment - which he had enjoyed previously and which suited his preferences at his stage of life and in light of his experiences with the respondent employer.
However, the award of compensation to him was limited to three months on the basis that there were other higher paid opportunities "out there" had he chosen to look for them.
In upholding the tribunal's decision the EAT took the opportunity to reiterate the principles which apply in relation to mitigation. It also disapproved of the idea that the employee must take all reasonable steps to mitigate - such that a failure to take one reasonable step would automatically put the employee in breach of the duty to mitigate and require