A local authority put its window-cleaning contract out for re-tender, and the bid was won by F&G Cleaners Limited (F&G). Its bid was the cheapest because it had no directly employed window cleaners. After winning the contract, F&G refused to employ the outgoing contractor’s staff, denying that TUPE applied. Instead, it offered them “self-employed” “CIS” contract terms, which they rejected. The dismissals were automatically unfair because the cleaners were dismissed as a result of the transfer.

F&G suggested that the cleaners should receive no compensation for future lost income because their refusal of self-employed terms was a failure to mitigate their losses. This argument was rejected by the EAT, who pointed out: firstly, that the self-employed terms were inferior to direct employment, as they meant a loss of job security, PAYE taxation and expenses, and secondly, that the duty to mitigate losses is only triggered once a dismissal has taken place. Since these claimants turned down offers of self-employment before being dismissed from their employment with F&G, no duty to mitigate had been triggered.

F&G Cleaners Limited v Saddington [2012] UKEAT/140/11/JQT