Employee's Duty to Mitigate

The Court of Appeal has handed down its decision in Wilding v British Telecommunications plc. It has dismissed the employee's appeal from the finding that he failed to mitigate his losses.

Click here to see the full decision

Facts

Mr Wilding worked for BT for 29 years. He developed back problems and, from 1997, was no longer able to work. He was dismissed on grounds of capability in early 1998. The employment tribunal held it to be an unfair dismissal and unlawful discrimination on grounds of disability because, amongst other things, the employer had failed to take into account medical evidence suggesting that Mr Wilding would be fit to work a reduced 20-hour week (and thus failed to make reasonable adjustments).

After the liability decision at the employment tribunal, BT made an open offer of re-engagement to Mr Wilding. This was on the basis of working a 20-hour week, with pro rata benefits and back pay. Mr Wilding refused. His grounds for refusal, set out in writing at the time, included:

• that BT was appealing the liability decision, maintaining it was 'perverse' for the employment tribunal to find Mr Wilding was capable of working a 20-hour week;
• the delay in making an offer of re-deployment;
• the fact that BT had refused to make any payment to Mr Wilding under its Injury Compensation Scheme;
• in the circumstances, trust and confidence had been destroyed.

The employment tribunal held that Mr Wilding's refusal to accept the offer was unreasonable, and that he had failed to mitigate his loss. In particular, it considered that the BT offer was wholly genuine and that Mr Wilding was acting unreasonably in refusing to accept the job, given he was quite incapable of obtaining employment elsewhere.

Decision

The Court of Appeal dismissed Mr Wilding's appeal (as had the EAT).

It held the tribunal had correctly approached the question of mitigation of loss. The correct test for deciding whether an employee had mitigated his/her loss was:

1. it is the duty of an employee to act in mitigation of loss as a reasonable person unaffected by the hope of compensation from the employer;
2. the onus is on the employer to show that the worker had unreasonably refused an offer of re-employment;
3. the test of unreasonableness is an objective one based on the totality of the evidence;
4. in applying that test, the attitude of the employer, the circumstances in which the offer was made and refused and the way in which the employee had been treated must be taken into account; and,
5. the court or tribunal must not be too stringent in its expectations of the injured party.

However, in adopting an objective approach, this will inevitably involve investigation into the employee's circumstances and abilities. In particular, if a suitable offer is made to an employee who has shown himself to be anxious to return to work, and that offer is then rejected for reasons peculiar to the employee, the tribunal is bound to investigate whether that decision was reasonable or unreasonable.

In this case, the tribunal had adopted the correct test and the appeal would be dismissed.