Building a defence against unfair dismissal: Demonstrating that a former employee could have done more to mitigate their loss

An often-overlooked tool in an employer’s armoury in an unfair dismissal case is attacking whether an employee has properly mitigated their loss.
However, it’s not as easy as just arguing that an employee should have done more to find another job.
In a recent case, Cooper Contracting Ltd v Lindsey, the EAT provided some useful guidance on the legal principles involved. In this case, the employer appealed to the EAT arguing that the claimant had failed to mitigate his losses as he had chosen self-employment at a lower remuneration, when there were other opportunities out there, had the claimant wished to look for them.
The EAT dismissed this appeal; they agreed that choosing self-employment was not unreasonable and that the claimant had not failed to mitigate, giving the following guidance:

  • The burden of proof is on the employer, and not the claimant.
  • If the employer does not address the issue of mitigating loss, then the Tribunal need not consider it.
  • It must be proved that the claimant acted unreasonably, not that what the claimant did was reasonable.
  • What is unreasonable is a matter of fact for the Tribunal to decide.
  • The claimant is not to be put on trial as if they were the party at fault, this would be setting the bar too high.
  • The test should take into account the views and wishes of the claimant.

What does this mean for employers?
In order for employers to prove that a former employee has failed to mitigate losses, they should ensure they have sufficient evidence of this. We would advise employers to start collecting evidence of suitable vacancies as soon as the employee is dismissed, if they think that there is a sniff of an unfair dismissal case. Trying to look back retrospectively to gather job ads is an almost impossible task. Useful evidence can also be in the form of an expert report on the local job market and what steps were open to the claimant.