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Compensation for loss earnings correctly reduced to zero

21 October 2011 #Employment


Employees can be awarded compensation for loss of earnings at Tribunal but they are also under a duty to mitigate their loss.  This means that employees need to apply for jobs and accept job offers where they can.  Once an employee has started new employment, their compensation for loss of earnings will usually stop at this date. 

In the EAT case of Debique v Ministry of Defence an employee made a claim against her employer for discrimination.  During the employee’s notice period, the employer offered a new posting to the employee on the basis that it would resolve the childcare difficulties which had given rise to the discrimination claim.  The employee refused to accept the job offer. 

The Tribunal had decided not to award the employee any compensation for loss of earnings because she had refused to accept this job offer.  The employee appealed.  The EAT was tasked with considering whether the employee should have accepted the job offer in order to mitigate her loss. 

The EAT decided that the employee’s failure to accept the job offer was an unreasonable failure to mitigate her loss and added that whether an employee had mitigated their loss was a question of fact for the Tribunal.

This case provides useful guidance on how compensation for loss of earnings should be calculated.  Where employers have offered an employee a new role but the employee fails to accept, they should argue at Tribunal that their compensation for loss of earnings be reduced to zero.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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