Look Ahead Housing and Care Ltd v Chetty

In assessing compensation for unfair dismissal, the burden of proving a failure to mitigate loss rests on the employer. There is no automatic period after which future loss must end or earnings must be assumed to return to their former level. The issue depends on the evidence.

A tribunal need not use the word Polkey if it addresses the substance of the question, including any real chance of fair dismissal and the evidence available to assess it. Appellate interference with a percentage reduction for contributory conduct requires a plain error of law or perversity. Injury-to-feelings awards allow a considerable margin of assessment.

The Employment Tribunal found that Ms Chetty and Ms Eduah had been unfairly dismissed and that their dismissals constituted race discrimination. On remedy, it awarded compensation for loss of earnings, injury to feelings and other losses. It rejected a Polkey reduction for Ms Eduah and made a 35% deduction for her contributory conduct.

The employer appealed on grounds including mitigation, Polkey, contributory conduct, injury to feelings, adequacy of reasons and costs. The appeal also revealed an agreed error in failing to deduct earnings received in alternative employment. The central issues were whether the Tribunal had applied the correct remedial principles and whether its reasons and assessments were legally sufficient.

1. Ms Chetty: compensation and mitigation. The Tribunal had properly considered whether Ms Chetty might have been fairly dismissed and had concluded that there was no basis for such a finding. The word Polkey was unnecessary where the substance of that inquiry had been addressed. The Tribunal was also entitled to find that she had mitigated her loss. Under Wilding v British Telecommunications plc [2002] EWCA Civ 349, the employer bears the burden of proving unreasonable failure to mitigate. No automatic cut-off applies to future loss of earnings; the assessment depends on the evidence and the labour-market circumstances.
2. The Tribunal had not used Ms Chetty’s previous warnings to establish contributory conduct. Conduct relating to matters for which she had not been dismissed could not contribute to the dismissal. The allegations that the award was punitive were too general and failed.
3. Ms Eduah: contributory conduct. The 35% deduction was not perverse. Percentage assessments involve impression, discretion, familiarity with the evidence and industrial realities. Appellate intervention requires a plain error of law or something akin to perversity, as explained in Hollier v Plysu [1983] IRLR 260. The Tribunal’s reasons, read holistically, sufficiently identified the competing considerations.
4. Reasons must enable parties to understand why they have lost. That obligation applies to central arguments and is reflected in Rule 30(6) of the Employment Tribunal Rules and Meek. The reasons here were sufficient except for the agreed calculation error.
5. The £6,000 injury-to-feelings award was not manifestly excessive or wrong in principle. The approach in Land Registry v McGlue UKEAT 0435/11 was adopted, including recognition of the Tribunal’s evidential advantage and the margin inherent in such assessments.
6. The appeal succeeded by consent to the extent that alternative earnings had to be deducted. The figure for Ms Chetty’s loss of wages was substituted. The matter was remitted to the same Tribunal on any necessary grossing-up adjustment. Ms Eduah’s total award was recorded as £16,231.25. The costs application under Rule 34A(2A) of the Employment Appeal Tribunal Rules 1993 was refused. No order was made for repayment of fees.

• Employment Tribunal: Found both respondents unfairly dismissed and racially discriminated against, and determined remedy in a Decision sent on 25 November 2013.
• Employment Appeal Tribunal: The liability appeal had previously been rejected by HHJ Eady on 23 May 2014. The present remedy appeal was dismissed on the substantive grounds, subject to the agreed correction of alternative-earnings calculations and remittal on grossing-up.