The appellant housing association (H) appealed, and the respondent former employee (M) cross-appealed, against an employment tribunal's calculation of a compensatory award made in M's favour following a finding of unfair dismissal. M had been dismissed from her employment with H as a support worker in July 2007. Shortly afterwards, M successfully applied for and started a university course. In April 2008, after discovering that the course only took up two days per week, M commenced employment with a local authority as a night social care worker. Following a finding of unfair dismissal but with contributory conduct on M's part, the tribunal made a compensatory award in M's favour for 30 weeks' loss of earnings, representing the period from M's dismissal to her obtaining employment with the local authority, less a 25 per cent deduction for contributory conduct. In making the award, the tribunal noted that M had no prospect of a favourable reference from H. It accepted M's evidence that a recruitment agency had advised her not to expect to obtain similar employment without a good reference, but rejected her account of having engaged in a detailed and lengthy job search immediately following her dismissal. The tribunal concluded that, in the circumstances, it had not been unreasonable for M to apply to university in order to improve her employment prospects, that the duty to mitigate loss was a continuing obligation that M had met by seeking work to fill her time around the university course, but that M's decision to accept and remain in employment with the local authority had broken the chain of causation for loss. It was H's case that the compensatory award was too high, and M's that the award should have been calculated using a longer time period. H submitted that there was an inconsistency between the tribunal's findings of fact as regards M's efforts to secure employment, and its conclusion, there being no finding that M had made regular job applications before her successful application to the local authority. M contended that her circumstances had been caused by her dismissal, and that the tribunal should have asked not whether her decision to accept employment with the local authority broke the chain of causation of loss, but rather whether, after accepting employment, she had failed to take reasonable steps to mitigate her loss.

HELD: (1)(a) In deciding the period over which a compensatory award should be allowed, a tribunal should identify what steps should have been taken by the employee to mitigate their loss, a date by which such steps would have produced an alternative income, and then reduce the amount of compensation by the amount of income it considered would and should have been earned thereafter, Savage v Saxena (1998) ICR 357 EAT applied and Wilding v British Telecommunications Plc (2002) EWCA Civ 349, (2002) ICR 1079 considered. The tribunal had found that, from starting her university course, M had made a significant job search to an extent that met her continuing obligation to mitigate her loss. The tribunal was not obliged to spell out to any greater extent than it did that M could not have been expected to immediately obtain work. Firstly, she had been unfairly dismissed on the grounds of misconduct; secondly she had received the recruitment agency's advice about her employment prospects in the absence of a favourable reference; thirdly, it was not reasonable to expect a dismissed employee to lower their sights immediately as regards the kind of job for which they applied. It might become reasonable to expect a dismissed employee to accept a lesser paid job with lesser status after a period of time, but that was a matter of fact and degree for the tribunal; (b) whether the application for a university course was itself something that disqualified M from a compensatory award was a question of fact for the tribunal. It was not the law that, where an employee sought higher or further education following dismissal, that of itself constituted a failure to mitigate, nor that such a course once applied for might necessarily be followed to a conclusion at the employer's expense. The tribunal's conclusion, that it was not unreasonable for M to have applied to university in order to improve her employment prospects, could not, in the circumstances, be interfered with on appeal. (2) The finding that M's decision to accept and remain in employment with the local authority broke the chain of causation for loss was unsound, and the case was remitted to the tribunal to consider whether M failed to mitigate her loss as from April 2008, or if not, from what later date, so that compensation should cease. That was a matter of fact for the tribunal.

Appeal dismissed, cross-appeal allowed