Purpose of compensation

Case 15: The facts

Ms Hardy was unfairly dismissed without being given her full notice. She claimed the right to be paid for the seven weeks of her notice period, but a tribunal awarded her just four weeks' pay because she had obtained a new job after that period.

The ruling

The EAT held that a compensatory award aims to compensate the employee for his/her losses rather than to penalise the employer. Hardy had a duty to mitigate her loss, which she did by obtaining the new job, but this meant that she could show no financial loss once she was in her new employment.

According to the EAT, the right to notice does not create a debt owed to the employee irrespective of whether s/he has suffered a loss.

In making this decision, the EAT rejected the ruling in the case of Norton Tool Co v Tewson [1972] IRLR 86 in favour of the Court of Appeal ruling in the case of Cerberus Software v Rowley [2001] IRLR 160.

Hardy v Polk (Leeds) [2004] IRLR 420