It is important for all Claimants to have a realistic understanding of the value of their Employment Tribunal claim and how the Employment Tribunal will assess their potential compensation.
This blog considers the specific claim of Unfair Dismissal and how compensation is calculated by the Employment Tribunal.
Schedule of Loss
Usually, once you have submitted a claim of Unfair Dismissal with the Employment Tribunal, the next document a Claimant will be asked to prepare is a Schedule of Loss. This document will be shared with both the Respondent and the Employment Tribunal and will set out the amount of compensation the Claimant is seeking to be awarded.
When considering a claim of Unfair Dismissal, compensation is broken down into two separate headings: Basic Award and Compensatory Award.
Basic Award
The Basic Award is calculated using a specific formula of years of service x age multiplier x gross weekly wage.
For example, Mr X was 34 years old. At the time of his dismissal, he had worked at the Company for 9 years and received a gross weekly wage of £650. His Basic Award calculation would be: 9 (years of service) x 1 (age multiplier) x £650 (gross weekly wage) = £5,850.
Please be aware that there are some exceptions to the above formula that may affect the calculation, for example, if you are over the age of 41 and/or if your gross weekly wage exceeds the applicable statutory limit. It is therefore important to take specialist employment advice when calculating compensation to ensure that the correct approach is used.
Compensatory Award
The Compensation Award is designed to put you back in the position you would have been in had you not been unfairly dismissed.
Accordingly, this Award is calculated with reference to the net loss of income and benefits that arise from your dismissal. Benefits which can be claimed include pension contributions, bonus payments, car allowance etc.
Please be aware that there is a maximum limit on the amount that can be claimed. At present, the maximum is one year’s net income or £123,543, whichever is lower.
When calculating your compensatory award, it is very important for all Claimants to be aware of their strict duty to mitigate their loss. This means they must actively search for and seek to secure new employment. Once you secure new employment, the amount of compensation you can claim may stop or be reduce. However, it is important that you try and mitigate your loss. If you don’t, the Employment Tribunal is allowed to substantially reduce any compensation awarded to reflect your failure to mitigate your loss.
Within the Compensatory Award you can also claim nominal figures for loss of statutory employment protection and expenses.
Further Adjustments to Compensation
As highlighted above, compensation for Unfair Dismissal can vary depending on the particular facts of the dismissal and the Claimant’s circumstances.
Examples of further amendments to a compensation assessment include:
- Reduction for contributory fault – If the Claimant contributed to their dismissal by some act of misconduct, the award may be reduced.
- Failure to follow ACAS Code of Conduct – If either party fails to comply with the ACAS Code of Conduct on Grievance and Disciplinary, the Employment Tribunal can increase or decrease compensation.
- Procedural Unfairness – Compensation can be reduced if the Employment Tribunal considers that the dismissal was only procedurally unfair and that, had a proper procedure had been followed, a fair dismissal would have resulted.
- Unfair Dismissal due to Redundancy – If your claim concerns redundancy related Unfair Dismissal, the Basic Award may be affected by any statutory redundancy payment received.
How Can Lincs Law Employment Solicitors Help You
If you would like further help and advice in respect of Employment Tribunal claims and compensation, please call us on 01522 440512 for a free, no obligation, initial phone enquiry. For more information on the assistance we can provide, please visit our website at https://lincslaw.co.uk/services/employees/
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