28-10-2011

Employee refusing offer of alternative employment gets nothing for loss of earnings

An employee who unreasonably refused an offer of alternative employment had not mitigated their losses as required by law, and was not entitled to any compensation for loss of earnings.

An employee succeeded in her claim for unfair dismissal on grounds of sex and race discrimination. However, the Employment Tribunal (ET) refused to award her any compensation for loss of earnings. This was because she had unreasonably refused an offer of alternative employment by her employer made during her notice period, which would have resolved the issues her claims were based on. She had therefore failed to mitigate her loss of earnings.

On appeal, the Employment Appeal Tribunal (EAT) said that the issue of whether her refusal was unreasonable was a question of fact. Provided it applied the correct legal test, it was therefore an issue for the ET to decide. The ET had applied the correct test, and the EAT would not overturn its decision.

Recommendation

Employers should consider whether it is appropriate to make an offer of alternative employment to employees claiming unfair dismissal, in order to reduce any compensation payable if the claim is successful.