Employment Tribunal compensation: tips to avoid a big pay-out

Understandably, the focus for employers when defending employment tribunal claims is on precisely that, the defence to the claim. Employers concentrate on providing evidence to undermine the claimant’s case and advance the respondent’s case. A lot of time and effort is spent gathering documents that set out the factual position and formulating arguments, in the hope that the employment tribunal accepts the respondent’s defence and dismisses the claims.

But what if it doesn’t, what if the respondent loses? Well, then the tribunal will go on to consider how much compensation should be awarded to the claimant. This is often decided at the same hearing as liability. 

In a claim involving termination of employment, the loss will relate mostly to loss of salary until the claimant gets another job at the same or a higher rate. However, often a claimant will not have a new job by the time of the tribunal hearing and the tribunal can award ongoing future loss. 

Claimants should not just sit back and do nothing; they have a duty to mitigate their loss. This essentially means taking reasonable steps to find new employment or paid work. If the tribunal decides that a claimant hasn’t done this, the amount of compensation awarded can be reduced, often quite significantly. 

However, what is often overlooked is that the burden is on the respondent to show that the claimant has failed to mitigate his or her loss. The Employment Appeal Tribunal reminded us of this last month in Edward v Tavistock and Portman NHS Foundation Trust (a useful case setting out helpful guidance on mitigation). This means that a respondent needs to put effort into showing what reasonable steps a claimant could and should have taken. The earlier a respondent turns its mind to this the better. 

If the respondent does not submit any mitigation evidence, the tribunal has no obligation to find the claimant has failed to mitigate his or her loss (even if they submit no evidence either), and compensation will not be reduced.

Our advice is that as soon as an employment tribunal claim lands from a claimant, the respondent should set up job alerts on national and sector specific job websites, for jobs the claimant’s former line-manager believes it would be reasonable for the claimant to apply for. Someone should keep a record of job vacancies (adverts) that arise right up until the start of the tribunal hearing. It will then be easier to include these in the final hearing bundle and to ask the claimant whether they applied for such jobs and if not, why not. Whilst it is possible to retrospectively look for historic job vacancies, this is a far harder task and does not yield full results.