If you are successful in a claim for Unfair Dismissal, you are likely to seek compensation for loss of earnings. Read on for advice on maximising your losses and reducing the risk of your opponent claiming you failed to “mitigate your losses”.
What Compensation Can You Claim?
If you have succeeded in your claim for Unfair Dismissal, the Employment Tribunal will consider if you are entitled to any compensation. Compensation for claims of this nature include the basic award, and the compensatory award. For more information about these heads of compensation, see my earlier blog at – https://lincslaw.co.uk/blog/how-is-unfair-dismissal-compensation-calculated/
Compensatory Award – What Is Loss of Earnings?
The compensatory award is largely made up of loss of earnings. The first way to ensure you maximise your compensation when claiming loss of earnings is to ensure you properly address all your losses. This might seem simple, but employee benefits are often overlooked. When preparing your Schedule of Loss, you should include loss of salary, and benefits such as car allowance, employer pension contributions, private health cover, gym membership etc….
What Does Mitigation of Loss Mean?
In simple terms, mitigating your losses means doing everything in your power to keep your losses to a minimum. This is important for two reasons. Firstly, the Employment Tribunal will invariably consider if you did all you could to keep your losses as low as possible. Secondly, the Respondent (if they are well prepared) will do all they can to try and reduce your compensation. Alleging you failed to keep your losses in check, is an easy win for them and if they show you didn’t bother looking for new work, your award can dramatically reduce.
What Can You Do To Bolster Your Position?
To show you tried to keep your losses as low as possible, apply for as many jobs as you can following your dismissal. This means applying for any roles you could reasonably undertake, even if that role is not in your chosen area of work. For example, it may well be sensible for someone working in an administrative role, to extend the ambit of their search and apply for a role in retail.
What Evidence Should You Keep?
To maximise your losses, you must show the Employment Tribunal evidence of looking for a new job. This means that from the moment of dismissal, you should keep the following evidence:
- Copies of application forms you fill in, along with any responses.
- Emails, letters, and messages you send or receive to recruitment companies or prospective employers.
- Keep a diary of any visits or telephone calls you make to recruitment companies or prospective employers.
- Keep a copy of any logs you complete for Job Seekers Allowance or other benefits.
This evidence should be included in your Employment Tribunal bundle in a separate section titled Remedy. This way, if the Respondent accuses you of doing nothing to find new work, you will be able to refute their argument.
Why Is This Important?
This is important because if the Employment Tribunal make a finding that you did not keep your losses to a minimum, they can make a significant reduction to your compensation for loss of earnings. Let’s look at a hypothetical example of how the Tribunal could use a failure to mitigate to reduce a claim for loss of earnings: –
Mr X was found to have been unfairly dismissed from his job as a warehouse operative. He claimed 9 months loss of earnings which equated to £20,250. When looking at his period of loss, the Respondent provided the Employment Tribunal with copies of 50 job adverts for warehouse operative roles within a 10-mile radius of where Mr X lived (all with good public transport connections). Mr X, in contrast, provided no evidence of any jobs that he had applied for and during cross examination said he hadn’t worried about looking for a job because he was hoping to recover his wages as part of his claim.
On the face of it, the Employment Tribunal are likely to reduce Mr X’s compensation because of his failure to mitigate his losses. The impact to Mr X could be grave and his claim for 9 months loss of earnings could be reduced to say just 1 month (£2,250) or even nothing.
Lincs Law Employment Solicitors Can Help You
If you are preparing for an Employment Tribunal hearing and need help assessing and maximising your losses, please contact us for a free, no obligation consultation with one of our fully qualified employment solicitors. Simply use the contact form, engage in a webchat, email email@example.com or call us on 01522 440512 and we will be happy to help.
Sophie Goodwill, Director
Lincs Law Employment Solicitors