Whistleblowing and Mitigation of Loss
Can an employee who was unfairly dismissed for whistleblowing claim that she reasonably failed to mitigate her losses owing to concerns that she would be stigmatised by future employers? This is the question that was considered by the Employment Appeal Tribunal in the case of Hilco Capital Ltd v Harrington.
The Claimant, Ms Harrington, worked for the financial services company, Hilco Capital, until her dismissal in 2017. She successfully pursued complaints of unfair dismissal and whistleblowing in the Employment Tribunal. At the remedy hearing, the Claimant said that she had not applied for alternative roles as she feared she would be stigmatised within the financial services industry as a consequence of the disclosures she had made and the fact that she had pursued a complaint in the Employment Tribunal. Instead, she decided to wait until the Judgment was published.
The Tribunal consequently made a significant compensatory award for loss of earnings, in respect of which the Respondent appealed, stating that the Claimant’s failure to mitigate her losses was not reasonable.
The Employment Appeal Tribunal accepted the Respondent’s appeal and confirmed that the Court of Appeal’s approach regarding stigma damages, as set out in Abbey National Plc v Chagger should be broadly followed when considering mitigation of loss and specifically, that the Claimant must have evidence to support an assertion that they would suffer as loss as a consequence of stigma.
Once the Respondent has proved that the Claimant has failed to mitigate loss, the burden then shifts to the Claimant to prove, with evidence, that failure was reasonable. In this case, the claim was remitted to the Tribunal for further findings.
This case highlights the importance of having proper evidence to support any reasons for failing to mitigate losses. The Claimant’s evidence, in this case, was based upon assumption, rather than her making attempts to apply for roles and being rejected. Once the Respondent discharges the burden of proving that a Claimant had failed to mitigate loss, it is up to the Claimant to show that failure was reasonable and provide evidence in support.