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In the case of Cooper Contracting Ltd v Lindsey, the Employment Appeal Tribunal (the “EAT”) dismissed an appeal challenging the compensation awarded to a former employee following a successful unfair dismissal claim. When considering this appeal, the EAT set out a number of important principles that should be considered when deciding whether or not a former employee has properly mitigated their loss.
Mr Lindsey worked for Cooper Contracting as a carpenter for 21 months until they terminated his employment contract in December 2013. Following his dismissal, Mr Lindsey was successful in bringing an unfair dismissal claim. Mr Lindsey was awarded lost income up to the date of the hearing and future losses (which were limited to three months from the hearing). Cooper Contracting appealed against the compensatory award as they believed that, by returning to his former role as a self-employed carpenter and by failing to pursue more lucrative employment opportunities, the Claimant had not taken all reasonable steps to mitigate his loss and his compensation should be reduced accordingly. Cooper Contracting also sought to argue that the Judge at the Employment Tribunal had effectively found that if Mr Lindsey did not take a job within 3 months of the date of the hearing, he would have failed to mitigate his loss.
When considering the appeal, the EAT set out the following principles in relation to mitigation of loss.
Contrary to what had been suggested by Cooper Contracting, it was held that the Employment Tribunal Judge had not said that Mr Lindsey would have failed to have mitigated his loss by remaining as a self-employed person for the three month period. Rather, the fact that the Claimant was unwilling to consider more lucrative employment opportunities meant that it was “just and equitable” under s123 of the Employment Rights Act 1996 to cap future loss at three months to ensure the award was fair and did not overcompensate Mr Lindsey.
Generally, adopting the principles set out above, the judge had not erred in law in concluding that Mr Lindsey had not acted unreasonably in pursuing self-employment.
If you need advice in relation to unfair dismissal, an appeal or another aspect of employment law, please contact a member of our employment team.
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