Mitigation of loss and preparation time orders
Rad Kohanzad appeared for the Respondent in Kirkland v Caroline Mason t/a Hawthorn Education Services [2026] EAT 108, an appeal concerning compensation for unfair dismissal and the calculation of a preparation time order. The Employment Appeal Tribunal held that the Employment Tribunal had wrongly approached the burden of proof on mitigation of loss and had not calculated the preparation time order in accordance with the applicable procedural rules. The appeal was allowed, and both awards were remitted to a differently constituted Employment Tribunal for redetermination.
Background: unfair dismissal and the remedy decision
Patricia Kirkland worked as an administration manager for Hawthorn Education Services from February 2019 until her dismissal on 24 August 2022. Her employer had dismissed her summarily for alleged misconduct without an investigation or a dismissal procedure.
In its liability judgment of May 2024, the Employment Tribunal found that the dismissal was unfair. It subsequently awarded Ms Kirkland £9,875.74 across several heads of claim, including a compensatory award for unfair dismissal of £4,417.46 and a preparation time order of £1,000.
Ms Kirkland appealed against two aspects of the remedy decision. First, she argued that the Tribunal had wrongly placed the burden of proof on her when assessing whether she had taken reasonable steps to mitigate her loss of earnings. Secondly, she argued that the preparation time order had been set at a fixed figure without the calculation required by the Employment Tribunal Rules of Procedure 2013.
Rad Kohanzad represented the Respondent in the EAT. He sought to uphold the Tribunal's decisions on both issues.
1. Mitigation of loss: who bears the burden of proof?
The legal test
When calculating compensation for unfair dismissal, a Tribunal may need to determine whether the claimant has failed to mitigate their loss of earnings. This involves assessing whether the claimant acted unreasonably in failing to take steps to reduce the loss caused by the dismissal.
The burden of proving an unreasonable failure to mitigate rests on the employer. The claimant does not have to prove that every decision they made was reasonable.
The EAT considered the principles in Wilding v British Telecommunications plc [2002] EWCA Civ 349 and Cooper Contracting Ltd v Lindsey UKEAT/0184/15/JOJ. These authorities establish that the assessment is objective and must take account of the circumstances as a whole. There is an important distinction between conduct that is not reasonable and conduct that is positively unreasonable.
The parties' arguments
Ms Kirkland had claimed 19 months of lost earnings. The Employment Tribunal awarded only six months, finding that she had not sufficiently mitigated her loss because she had prioritised developing her property rental business over finding replacement employment.
The Respondent argued that the Tribunal had not reversed the burden of proof and that its factual findings supported the amount awarded. Rad also argued that the Tribunal's approach to mitigation was consistent with the relevant legal principles and that it was not necessary for the Tribunal to investigate mitigation in the absence of evidence or submissions from the Respondent.
Why the EAT allowed the appeal
Judge Mathew Gullick KC concluded that the Tribunal's written reasons, read as a whole, showed that it had failed to apply the correct burden of proof.
The Tribunal had stated that it was “not satisfied that the Claimant has mitigated her loss”. However, it had not made a positive finding that Ms Kirkland had acted unreasonably in failing to mitigate her loss, as the legal test required.
The EAT rejected the argument that such a finding could be inferred from the Tribunal's other observations. The fact that the Tribunal might have reached a permissible figure for compensation did not cure an error in the reasoning process used to reach it.
The EAT also rejected the suggestion that the Tribunal could investigate mitigation in the absence of supporting evidence or submissions from the employer. The burden rested on the Respondent to establish that the claimant had acted unreasonably.
The EAT therefore allowed this ground of appeal.
2. Preparation time orders: a Tribunal must calculate the hours awarded
A preparation time order enables an unrepresented party to recover qualifying time spent preparing their case in circumstances where the Tribunal considers such an order appropriate. Under the applicable version of Rule 79 of the Employment Tribunal Rules of Procedure 2013, the Tribunal must assess the number of hours that reasonably and proportionately qualify and multiply that figure by the applicable hourly rate.
Ms Kirkland had claimed 155 hours of preparation time, supported by a detailed chronology and log of work. At the applicable rate of £43 per hour, the full amount claimed was £6,655. The Tribunal awarded £1,000, explaining that it had exercised its discretion to recognise additional preparation that could have been avoided had the Respondent acted reasonably.
The Respondent argued that the Tribunal was entitled to take a broad-brush approach and that its award could be understood as an assessment of approximately 23.26 hours.
The EAT rejected that argument. Although a Tribunal may take a broad-brush approach when assessing what amount of preparation time is reasonable and proportionate, it must still determine the number of hours to be awarded and multiply that figure by the prescribed rate.
The Tribunal had not identified the number of hours or referred to the hourly rate. Its reasoning indicated that it had selected a fixed cash sum instead of carrying out the calculation required by Rule 79.
The EAT also held that, even if the Tribunal had implicitly assessed a number of hours, it had failed to give adequate reasons for that assessment. Its explanation did not engage sufficiently with the detailed schedule and chronology submitted by Ms Kirkland.
The EAT therefore allowed this ground of appeal as well.
What did the EAT order?
The EAT set aside the compensatory award for unfair dismissal and the preparation time order, remitting both matters to a differently constituted Employment Tribunal.
The redetermination of the compensatory award was limited to mitigation of loss of earnings. The existing £500 award for loss of statutory rights was preserved.
The Tribunal's finding that a preparation time order was appropriate was also preserved. Only the amount of that order had to be reconsidered.
The EAT additionally set aside the 25% uplift for failure to comply with the ACAS Code of Practice so that it could be recalculated if the revised compensatory award changed the relevant figures. The entitlement to the 25% uplift itself was not challenged.
The EAT did not determine what the revised awards should be. Those calculations were left to the Employment Tribunal.
Key legal principles
The employer bears the burden of proving unreasonable failure to mitigate loss. A Tribunal must apply the correct legal test rather than require the claimant to demonstrate that their conduct was reasonable.
A potentially permissible outcome does not cure an error of law in the reasoning. The Tribunal must reach its decision through the correct legal approach.
A preparation time order must be calculated by reference to hours and the applicable hourly rate. A broad-brush assessment of reasonable and proportionate time is permissible, but a fixed figure without the required calculation is not.
Reasons must explain the assessment sufficiently. Where a preparation time claim is substantially reduced, the Tribunal must provide adequate reasons for the number of hours allowed.
These principles apply to the specific remedy issues considered in the judgment and should not be read as guaranteeing a particular level of compensation or preparation time award in another case.
What does this decision mean for someone considering an Employment Tribunal appeal?
Kirkland illustrates how an error in the calculation of compensation can provide an arguable ground of appeal even where the Tribunal's ultimate figure might appear reasonable.
For an unfair dismissal claimant, the distinction between failing to act reasonably and acting unreasonably is important when assessing mitigation of loss. The employer must establish the latter, and the Tribunal must apply that burden correctly.
The decision also demonstrates that a Tribunal's discretion over a preparation time order is not unlimited. The applicable rules prescribe how the amount must be calculated, and the reasons should explain how the award was reached.
However, not every disagreement about the amount of compensation or preparation time amounts to an error of law. The judgment, evidence, applicable rules and Tribunal's reasoning must be considered together to determine whether an appealable error exists.
If you have received an unfavourable Employment Tribunal decision, I can review the judgment and advise on whether there may be arguable grounds for an EAT appeal before you decide whether to incur the further costs of pursuing it. If you decide to proceed, I can also advise on and represent you in the appeal.
Find out more about my Employment Tribunal appeal review and advice service
Case details
Case: Patricia Kirkland v Caroline Mason trading as Hawthorn Education Services
Neutral citation: [2026] EAT 108
Case number: EA-2024-001454-AS
Judgment date: 9 July 2026
Judge: Judge Mathew Gullick KC
Hearing date: 9 July 2026
Appellant's counsel: Patricia Leonard, via the Free Representation Unit
Respondent's counsel: Rad Kohanzad, instructed by Croner
Outcome: Appeal allowed on both grounds; the compensatory award and preparation time order were set aside and remitted to a differently constituted Employment Tribunal. The ACAS uplift was also set aside for recalculation if necessary.
Official judgment: Read the full EAT judgment (PDF)
