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Cooper Contracting Ltd v Lindsey UKEAT/0815/15; (2016) EMPLR 004
22 October 2015
Employment Appeal Tribunal (EAT)
Compensation for unfair dismissal generally reflects the financial loss suffered by a successful claimant. If some of the loss could have been avoided had the claimant not acted unreasonably (for example by not looking for or accepting available employment), then compensation may be reduced because of the claimant’s ‘failure to mitigate’. This case confirms that it is up to the respondent to prove a failure to mitigate - ie that the claimant acted unreasonably. It is not enough for the respondent to point to some reasonable action the claimant could have taken but did not take which might have reduced the loss, because there could be more than one reasonable course of action; and tribunals should not apply a particularly high standard of ‘reasonableness’: “He is not to be put on trial as if the losses were his fault …”.
L was unfairly dismissed. He chose to work on a self-employed basis, even though more lucrative employment opportunities were available. The respondent argued that this meant he had not mitigated his loss. The tribunal, upheld by the EAT, held it was reasonable for him not to seek employment. The question, the EAT said, was not whether taking up alternative employment would have been reasonable, but whether not taking it up was unreasonable. This was a question of fact for the tribunal and it was entitled to conclude that there was no failure to mitigate. The tribunal had limited future loss (ie compensation for loss of earnings from the hearing date onwards) to three months, because higher paid employment was available and the respondent should not have to pay indefinitely for L’s choice to be self-employed. While arguably inconsistent with the conclusion that he had not failed to mitigate, the EAT pointed out that tribunals are required to award compensation which is just and equitable; the tribunal was entitled to conclude that it would not be just and equitable to award compensation for future loss of earnings indefinitely.