If an employee is unfairly dismissed by an employer and intends to bring an action against the employer for unfair dismissal, then both the employer and employee must be mindful of the employee’s duty to mitigate their losses. This is stated under s.123(4) of the Employment Rights Act 1996 where the employee will be expected to explain to the Tribunal what actions they have taken by way of mitigation. This includes looking for another job and applying for available state benefits.

The Tribunal is obliged to consider the question of mitigation in all cases. What steps it is reasonable for the employee to take will then be a question of fact for its determination. The courts have made clear, however, that the standard to be imposed on an employee, who has suffered unfair dismissal, should not be overly stringent. The burden of proof is on the employer, and it is not enough for the employer to show that there were other reasonable steps that the employee could have taken but did not take. It must show that the employee acted unreasonably in not taking them. This distinction reflects the fact that there is usually more than one reasonable course of action open to the employee (Wilding v British Telecommunications Plc [2002]). This point has been explained further in the recent Employment Appeal Tribunal (EAT) ruling of Cooper Contracting Ltd v Lindsey [2015], where the employer argued that there were more lucrative options available to the employee who opted to work as self-employed rather than as an employee following his dismissal. The EAT dismissed the employer’s appeal that awarding the employee three months of losses was unreasonable; the EAT confirming that by the employee accepting lower paid, yet more desirable employment was not an example of him acting unreasonably. The EAT confirmed that the Tribunal will take into account the views and wishes of the employee as one of the circumstances to ascertain whether they have acted unreasonably although it is the Tribunal’s assessment of reasonableness and not the employee’s that counts.

Failure to mitigate is likely to arise in several different circumstances. The most common argument raised by employers is that the employee had not made sufficient effort to look for new work or had confined their search to too narrow a range of jobs. Employees should therefore keep documentary evidence (e.g. job adverts, application letters) to show the steps they have taken to find new work. This obligation is ongoing so therefore the longer the dispute remains, the greater the opportunity for the employer to collate appropriate evidence to counter the employee’s claims as to quantum.

The duty to mitigate only arises after the dismissal. Therefore, where an employee rejects an offer of new terms before the dismissal has taken effect, this cannot be a failure to mitigate, as no duty to mitigate yet exists.

For further information about an employment issue, please contact our Employment Department.

Contacts:

Charles Grossman: c.grossman@fgdlaw.co.uk

What does the Consumer Rights Act say?

With the introduction of the Consumer Rights Act (CRA) in October, traders have had to rethink their Terms and Conditions of Sale to reflect consumer’s additional protection. It is now a requirement by law that in all contracts for the sale of goods there is an implied term that the goods supplied are to be of satisfactory quality. This widens the right to consumers as under the Sale of Goods Act 1979 this was only for business to business contracts. In the first six months the burden of proof lies with the trader to prove the goods were of satisfactory quality, an example of a reverse burden of proof.

The consumer may have a short-term right to reject the goods; the short-term right to reject under the CRA expires after 30 days (or a shorter period in the case of perishable goods). This 30 day period can be extended by agreement between the trader and the consumer but it cannot be reduced.

A consumer is only obliged to return the goods to the trader if the contract says so otherwise the consumer must simply make the goods available for collection. Whether the consumer sends the goods back or the trader collects them the trader must pay the costs of return.

The CRA contains a new provision which states that goods are not in conformity with the contract where all of the following apply:

• Installation of the goods forms part of the contract.
• The goods are installed by the trader or under the trader’s responsibility.
• The goods are installed incorrectly.

The CRA expressly states that bespoke goods are to be treated as goods, rather than the end product of services. This new provision reflects the position under the Sales and Guarantees Directive and ends some uncertainty over whether that aspect of the Directive had been implemented correctly in UK law.

Terms and Conditions

Traders will produce Terms and Conditions for The Supply of Goods Online, The Supply of Goods On-Premises, The Supply of Services On-Premises and The Supply of Goods and Services On-Premises.

The below is an exhaustive list of amendments which should be made to these Terms and Conditions in light of the CRA:

• Consumer obliged to return rejected goods (supply of goods)
• Right to cancel (supply of goods online)
• Trader may reject an order it it cannot meet a delivery specified by a consumer (supply of goods)
• Trader must deliver goods within 30 days unless agreed otherwise with consumer (supply of goods)
• Pre-contract information about delivery (supply of goods)
• Goods in conformity with contract (supply of goods)
• Goods as installed (supply of goods on-premises)

For a consumer’s Right to cancel we suggest inserting the following clause into your Terms and Conditions:

Exercising your right to change your mind (Consumer Contracts Regulations 2013). For most products bought online you have a legal right to change your mind within 14 days and receive a refund. These rights, under the Consumer Contracts Regulations 2013, are explained in more detail in these terms.

Contacts:

Raj Dhokia: r.dhokia@fgdlaw.co.uk