Window Machinery Sales Ltd (t/a Promac Group) v Luckey

In assessing compensation for unfair dismissal, the employer bears the burden of proving both an employee’s unreasonable failure to mitigate loss and the extent to which reasonable mitigation would have reduced it. The inquiry separates the reasonable steps expected, whether they were taken, and the likely financial effect of any omitted steps.

An Employment Tribunal may take account of its general knowledge of the local labour market. It need not give the detailed disclosure required where it makes particular use of a member’s specialised knowledge or experience. An appellate perversity challenge succeeds only where no reasonable tribunal, properly directing itself on the evidence and law, could have reached the decision.

The claimant, a skilled refurbishment engineer, succeeded before the Birmingham Employment Tribunal in claims for constructive unfair dismissal and breach of contract. The Tribunal found that, absent dismissal, he would have remained employed until age 65. It awarded compensation for loss extending to that date and found that he had complied with his duty to mitigate.

Following reconsideration, the Tribunal made a revised compensation award principally to reflect taxation. The employer appealed on the period of loss and mitigation. During the appeal, the parties identified an arithmetical error: the Tribunal had overstated the number of weeks to the claimant’s intended retirement date.

1. The appeal was allowed only to correct the calculation. The Tribunal intended to compensate the claimant to 28 January 2015, but mistakenly treated the relevant period as 164 rather than 112 weeks. The agreed corrected figure was substituted. The remaining grounds failed.
2. The Tribunal had evidence entitling it to find that the claimant would have remained employed until age 65. Its concise finding was sufficient. Neither the proposed possibility of earlier retirement nor workplace unhappiness made that conclusion perverse or inadequately reasoned.
3. Under Employment Rights Act 1996, section 123(4), the employer bears the burden of proving an unreasonable failure to mitigate and its financial effect. The mitigation inquiry may require separate consideration of: the reasonable steps expected; whether the employee took them; and the extent to which those steps would actually have reduced loss. The questions are linked, but logically distinct.
4. Although a reasonable employee will generally first seek comparable work and then widen the search if necessary, the employer adduced no evidence that alternative work would have mitigated this claimant’s loss. Given his age, specialist skills, and the relatively short period to intended retirement, the Tribunal was entitled to conclude that the employer had not discharged that burden.
5. The Tribunal was also entitled to use general knowledge of the West Midlands labour market. The disclosure guidance in Dugdale concerned particular use of specialised knowledge or experience held by a Tribunal member, not ordinary general knowledge used when assessing future loss. The mitigation finding was sufficiently reasoned and not perverse.

• Employment Appeal Tribunal: Appeal allowed solely to substitute the agreed corrected compensation figure; otherwise dismissed.
• Employment Tribunal at Birmingham: On 21 December 2012, upheld claims for constructive unfair dismissal and breach of contract and awarded compensation. On reconsideration dated 1 May 2014, it revoked that judgment and made a revised award to reflect taxation.