After the Claimant's successful claim against the Respondent, compensation for unfair dismissal was subject to reductions under the Polkey principle and on the basis that the Claimant had failed to fully mitigate his loss. The ET did not give any decision in respect of a claim that the Claimant had sustained loss by way of expenses incurred in setting up a new business. The ET rejected a claim for aggravated damages and erroneously made an award for injury to feelings in respect of unfair dismissal that was the subject of a cross-appeal conceded by the Claimant. The Claimant appealed.

The EAT allowed the appeal, first on the Polkey issue. The ET did not identify a proper evidential basis for the determination of a 10% reduction. On the mitigation issue, the ET, despite having properly directed itself as to the law, looked to the Claimant to prove that he had acted reasonably in setting up his own business, whereas it was for the Respondent to prove that he had acted unreasonably. The ET also failed to determine the claim for compensation to cover the costs of the Claimant establishing his new business. The claimant accepted that there was no jurisdiction for the ET to make an award for injury to feelings in respect of the dismissal so the cross appeal was allowed. Finally, the EAT agreed that consideration of aggravated damages should also be dealt with at the remitted hearing.