Compensation – Unfair Dismissal

If an employee wins a claim for unfair dismissal, a Tribunal will decide what compensation is fair in the circumstances. The stakes are raised in a whistleblowing unfair dismissal because the statutory unfair dismissal compensation cap (currently £93,878 or a year’s gross pay, whichever is less) does not apply. Employees are required to ‘mitigate’ their losses by seeking employment elsewhere. If there are additional reasons why the employee in a whistleblowing case has not been able to secure alternative employment - because of stigma associate with the whistleblowing - they will need to provide evidence in support of that contention.

In Hilco Capital v Harrington, the employee won her claim for unfair dismissal because of whistleblowing. She did not apply for any new jobs before the remedy hearing. There had been suitable jobs she could have applied for. However, she said it would have been pointless to apply for them because any company would have stigmatised her as a whistle blower and not given her the job (once she had explained why she had lost her old job). The Tribunal said that her failure to apply for jobs was not an unreasonable failure to mitigate her losses. The Tribunal awarded her £244,328.45. The employer appealed, saying the Tribunal had made a legal error by awarding stigma damages without the employee providing any evidence to support that suspicion.

The EAT agreed with the employer. The onus was on the employer to prove that the employee has not properly mitigated their losses. A failure to look for work at all could well amount to a failure to mitigate loss, unless there is a good explanation for it. It was the Tribunal’s job to decide in this case whether it was such a failure. The EAT said that making no job applications wasn’t necessarily fatal if the employee had put forward other evidence which supported her concerns about being stigmatised by the whistleblowing. In other successful cases, employees had made some applications, and failed, which supported their assertions that they were being marginalised in looking for work. Here, the employee had not applied for a single job in three years. She had failed to mitigate her losses, because there was no evidence, or findings of fact, to support her assertions that job seeking would have been pointless.

This case serves as a reminder to both employers and employees that employees are required to look for alternative work if they have been unfairly dismissed. In this case, the employee had not applied for a single job in three years. In the absence of any evidence to support why this was reasonable, it was not. She had failed to mitigate her losses and the employer was not required to pay for associated losses.

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