Why Mitigation Evidence Matters More Than Ever In Employment Tribunal Claims

When defending an employment tribunal claim, employers often focus on liability, that is, whether they are legally responsible for the alleged wrongdoing. However, where a claimant succeeds, one of the most important factors influencing the value of an award can be whether the claimant has taken reasonable steps to ‘mitigate their loss’.

Recent procedural and legislative changes mean that evidence that an employee has mitigated their losses is likely to become increasingly significant in reducing compensation awards. Employers who fail to gather and preserve relevant evidence may find themselves unable to challenge substantial claims for future loss of earnings.

What is mitigation of loss?

A claimant who has lost their job is expected to take reasonable steps to reduce their financial loss, such as looking for alternative employment or other sources of income.

However, an employee does not have to prove that they mitigated their loss. The burden falls on the employer to show that the claimant acted unreasonably in failing to do so. This distinction was reaffirmed by the Employment Appeal Tribunal (EAT) in the recent case of Kirkland v Mason.

The EAT confirmed that the correct question is not whether the employee proved they mitigated their loss, but whether the employer proved that they acted unreasonably in failing to mitigate it.

The lesson from Kirkland v Mason

In Kirland v Mason, the employer successfully argued before the Employment Tribunal that the claimant had not taken sufficient steps to mitigate her losses and that she had prioritised growing her Airbnb business over seeking alternative employment. The Tribunal therefore reduced her claim for 19 months’ lost earnings to six months.  

The EAT overturned that approach because the Employment Tribunal had applied the wrong legal test. The Tribunal had stated that it was “not satisfied that the claimant had mitigated her loss“, effectively placing the burden on the claimant. The EAT held that the employer had to prove that the claimant acted unreasonably and that no such finding had been made.

The claimant had made six job applications over approximately 12 months, while the employer relied on evidence of available vacancies and argued that she had chosen to focus on her growing property letting business rather than wider employment opportunities.

Had the employer been able to establish that the claimant had acted unreasonably, the outcome on compensation may have been different.

Why mitigation evidence is becoming more important

Traditionally, many unfair dismissal claims involved relatively modest loss periods and awards because claims had to be issued within three months of dismissal, they progressed reasonably quickly and compensation was capped. This is changing.

It now takes longer to reach a final hearing

The longer a case continues, the greater the scope for a claimant to argue for ongoing loss of earnings—potentially covering many months or even years. Claims are taking longer to reach a final hearing due to:

1. Longer Acas early conciliation periods: from 1 December 2025, the Acas Early Conciliation period was extended from a maximum of six weeks to a maximum of 12 weeks.
2. Extended time limit for bringing claims: on 1 October 2026, the time limit for bringing employment tribunal claims increased from three months to six months under the Employment Rights Act 2025 reforms.
3. Growing delays in the employment tribunal system: employment tribunal cases are often taking longer to reach a final hearing than they did previously.

The removal of the cap on compensation

The most significant change is the planned removal of the cap on compensatory awards for unfair dismissal, which will come into effect on 1 January 2027.

Where compensation is uncapped, arguments over future loss become more valuable and more heavily contested. In some cases, the difference between establishing a failure to mitigate and failing to do so could amount to tens or even hundreds of thousands of pounds.

As a result, mitigation is likely to move from being a relatively secondary remedy issue to a central part of compensation disputes.

How can employers protect their position?

Employers should start treating mitigation evidence as something that needs to be gathered from the outset of a dispute, rather than shortly before a remedy hearing. Employers who preserve evidence of job vacancies, labour market conditions, recruitment activity and alternative earning opportunities will be better placed to challenge substantial schedules of loss and reduce compensation.

Whilst the claimant’s duty of disclosure will include evidence relating to their duty to take reasonable steps to mitigate their loss, employers can take practical steps to protect their own position, including:

• Retaining evidence of suitable vacancies available in the claimant’s geographical area and sector.
• Monitoring LinkedIn profiles and other publicly available information showing self-employment, business ventures or alternative work.
• Keeping records of any known job offers, references or support offered to the former employee.
• Preserving evidence demonstrating that flexible, part-time or comparable work was available.
• Reviewing schedules of loss critically and testing whether the claimant’s alleged losses are genuinely attributable to the dismissal.
• Considering mitigation issues during Acas Early Conciliation and throughout settlement discussions.

Mitigation can be a powerful defence to compensation claims

As claim periods lengthen and compensation awards increase, employers can expect remedy hearings to receive far greater scrutiny than in the past.

The EAT’s decision in Kirkland v Mason serves as a useful reminder that mitigation remains a powerful defence to excessive compensation claims. However, employers can only rely on it if they have the evidence to prove that the claimant acted unreasonably. In an era of longer claim timelines and potentially uncapped awards, preserving that evidence may be more important than ever.