In case you missed it, our newsletter for March can be found here and features strike action, national minimum wage increases, and an employee who was described as a pain in the arse! In our last case law update we looked at without prejudice correspondence and how knowing the rules when drafting correspondence can be vital to avoiding embarrassment in the Tribunal! This week we are looking at how the Tribunal can adjust their awards based on the mitigation of loss.

Mr Edward, the Claimant, who is in his mid-60s, was employed as a band 5 data officer at the Respondent NHS Trust. After trying to downgrade his position to a band 4, the Respondent then dismissed him on the basis that they had no vacancies at that banding. The Claimant brought a claim against the Trust on the grounds that he had suffered victimisation because of his race and age, he had made complaints about these previously.

While Mr Edward had brought his claim to the Employment Tribunal and won, the amount he should have been awarded was appealed on the grounds that he had failed to mitigate his loss, as he had not found a job in a reasonable time frame after his dismissal. The Claimant argued he believed he would be given a negative reference having been dismissed for conduct making it difficult to apply. However, the Claimant was out of work for almost two and a half years, only finding a job in the last few months before the hearing. On top of that, he had not applied for positions at the band 4 level, despite being qualified and able to do so. The Tribunal ultimately reduced his compensatory award by 50% for failure to mitigate his loss.

The Claimant appealed and the Employment Appeals Tribunal allowed the appeal and referred the claim back to Tribunal to reassess remedy. It held the ET was wrong to reduce the award by a blanket 50% as this was not the correct approach on the facts of the case. Instead the remedy judgment would have to consider:

  1. Whether the Claimant was unreasonable in the steps he took to mitigate his loss.
  2. If he had acted reasonably, when would he likely have secured employment.
  3. If he did secure employment, what would the salary have likely been.

The level of remedy is yet to be reassessed.

The Takeaway Point

Whilst the EAT might have allowed the appeal, the Claimant in this case may not necessarily expect a significantly higher remedy. Claimants have a duty to mitigate their loss and as such cannot fail to apply for jobs for over a year and expect to receive a substantial remedy at Tribunal. Given the test above, it is quite common for a Judge to believe the Claimant could have found similar work in 3-6 months and then cap losses from that date.

The question of remedy throws up two key practical implications for employers:

  1. If you receive reference requests ensure that the reference is not unfairly punitive as it will prevent the Claimant from mitigating their loss and increase the value of any tribunal claim.

If you do not receive a reference request then question remedy early in disclosure as this can then be used to negotiate a commercial settlement or encourage withdrawal.