Praxis Real Estate Management Ltd v Nichols

An Employment Tribunal gives sufficient reasons where it identifies the applicable legal principles, makes the essential factual findings, and explains why those findings produce its conclusion. It need not provide elaborate analysis or address an authority relied upon only as an illustration, provided its reasoning shows that it applied the correct principles.

An appeal alleging perversity succeeds only where the decision was one that no reasonable tribunal, properly appreciating the evidence and law, could have reached. A tribunal may find that starting a business was reasonable mitigation where alternative employment was limited and there was a tenable evidential basis for prospects of commercial success.

The employee was dismissed for incapability from a specialised property asset-management role. The Employment Tribunal, Manchester, had previously held the dismissal unfair and reduced compensation by 50 per cent under Polkey. At a subsequent remedies hearing it awarded compensation to November 2012.

The employer contended that the employee had failed to mitigate his loss by establishing a property investment business rather than obtaining employment. The Tribunal found that his employment options were limited, that use of his father's property-business contacts and resources made the venture a reasonable risk, and that the business was likely to produce income. The employer appealed, alleging inadequate reasons and perversity.

1. Appeal dismissed. The Employment Tribunal gave adequate reasons for finding that the employee had reasonably mitigated his loss by setting up a business.

2. Applying Meek v City of Birmingham District Council [1987] IRLR 250, reasons need not be elaborate or formally drafted. They must state the essential factual conclusions and explain why the parties have won or lost, so that an appellate court can identify any question of law. The Tribunal met that standard. It found limited alternative opportunities, a potential crossover between the employee's existing property experience and the new business, access to his father's contacts and resources, and evidence that the business was beginning to obtain work.

3. The Tribunal was not required specifically to address Gardner Hill v Roland Burger Technics Ltd [1982] IRLR 498. That authority was illustrative of the general mitigation principles already correctly identified. A tribunal need not distinguish every authority advanced for an illustrative purpose if its reasons demonstrate application of the governing law.

4. The perversity challenge failed. Under Yeboah v Crofton [2002] IRLR 634, such an appeal requires an overwhelming case that no reasonable tribunal, properly appreciating the evidence and law, could have reached the decision. The Tribunal's findings were tenable. It could accept the employee's evidence, including documentary evidence produced at the hearing about prospective contracts, and conclude that establishing the business was reasonable mitigation.

• Employment Appeal Tribunal: dismissed the employer's appeal against the remedies judgment.
• Employment Tribunal, Manchester: on 18 May 2012 awarded £27,577.75 compensation for unfair dismissal after finding that the employee had reasonably mitigated his loss.
• Employment Tribunal, Manchester: on 29 February 2012 held that the dismissal was unfair and reduced the award by 50 per cent under Polkey.