Debique v Ministry of Defence  IRLR 471
The EAT confirmed that the law relating to mitigation of loss is clear in this situation. It is for the employer to show that the employee was acting unreasonably in failing to accept an offer of re-engagement. Whether or not the behaviour of the employee is unreasonable is a question of fact to be determined by the Tribunal on the evidence before it. The test of what is reasonable is an objective one, with the question being considered in light of the employee’s own circumstances.
In determining that the employee’s failure to accept the new post was unreasonable, the EAT focussed on her reasons for refusal and found that the discriminatory conduct had not caused her such upset that she was unable to make a wholly rational analysis of the offer. In any case, this did not play a substantial part in her decision. The EAT commented that the employee was unreasonable in not at least taking up the offer and “seeing what happened”.
It is commonplace to see arguments by employers for a reduction in compensation awarded in redundancy cases, where the employee has refused the offer of alternative employment that would limit the financial impact of their dismissal. This judgment makes clear that a refusal by an employee to take up another post could result in a reduction in an award, even in circumstances where the employee has resigned in response to alleged discriminatory treatment.
Employers will want to bear in mind the tactical advantage that may be gained in litigation by making a reasonable offer of alternative employment (or even atypical work such as consultancy arrangements) to a departing employee, in such a way as to provide a convincing argument that the employee’s unreasonable refusal reduces their entitlement to compensation.