Mitigation

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Introduction

See Fair Work Act 2009 s.392(2)(d)

When considering ordering compensation it is necessary to consider what steps a person has taken to mitigate their loss.[1]

This means that a person must provide evidence that they have taken reasonable steps to minimise the impact of the dismissal.[2]

What is reasonable depends on the circumstances of the case.[3]

A person is not required to take unreasonable steps to mitigate their loss such as:

  • expending money, or
  • destroying or sacrificing their property rights.[4]

Mitigation means the employee has taken deliberate, positive steps to lessen the effect that the dismissal has had on them, such as by seeking new employment.

Offers of re-employment

The general position is that a wrongfully dismissed person cannot claim a loss which would have been avoided by accepting a reasonable offer of new employment.[5] The refusal of another position with the employer at the same rate of pay may amount to a failure to mitigate.[6]

The following circumstances may not amount to a failure to mitigate when re-employment is offered:

  • the refusal of another position with the employer at the same rate of pay but with lesser status, or[7]
  • the refusal of a position with the employer where the employee has lost trust and confidence.[8]

Case examples

Employee mitigated loss

Employee did NOT mitigate loss

References

[1] Fair Work Act s.392(2)(d).

[2]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 34; citing Lockwood Security Products Pty Limited v Sulocki and Ors, PR908053 (AIRCFB, Giudice J, Lacy SDP, Blair C, 23 August 2001) at para. 45.

[3]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 34; citing Payzu Ltd v Saunders [1919] 2 KB 581.

[4]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 35; citing Burns v M.A.N. Automotive (Aust.) Pty Ltd (1986) 161 CLR 653, 659 per Gibbs CJ and at 677 per Brennan J; Jewelowski v Propp [1944] 1 All ER 483, 484 (Lewis J); and Elliot Steam Tug v Shipping Controller [1922] 1 KB 127, 140‒141.

[5]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 45; citing Williamson v Commonwealth (1907) 5 CLR 174, 185.

[6]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 45; citing Brace v Calder [1895] 2 QB 253.

[7]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 48.

[8]Biviano v Suji Kim Collection, PR915963 (AIRCFB, Ross VP, O'Callaghan SDP, Foggo C, 28 March 2002) at para. 47; citing Bostik (Australia) Pty Ltd v Gorgevski (No. 1), (1992) 36 FCR 20, 32.

Updated time

Last updated

15 January 2020

 

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