Valuing Your Employment Tribunal Claim
When deciding whether to start litigation, it is important to get a realistic valuation of how much your claim could be worth. For more information about how the Employment Tribunal value claims and decide compensation, read on.
When to consider valuing your claims?
When we first meet with clients they are, understandably, focused upon the injustice and unfairness of their situation and often have an emotional imperative to want to begin Employment Tribunal litigation. However, even with that emotional imperative, it is important to consider the value of the claim and properly assess the risks of litigation at the earliest possible stage.
For our clients, a full assessment and an estimate of the value of any claim is provided at the very first appointment. This enables our clients to make an informed choice about how they want to proceed and take into account the information we have provided at their Fixed Fee Consultation before issuing their Employment Tribunal claim.
Valuation of claims
For those readers who are not Lincs Law clients (we won’t hold that against you!), I set out below a number of considerations to take into account when assessing the value of an Employment Tribunal claim, particularly, a successful unfair dismissal claim:-
- Most unfair dismissal claims are subject to a maximum amount of compensation;
- Unfair dismissal compensation is split into two awards, a basic award and a compensatory award;
- The basic award is a fixed amount calculated in the same way as a statutory redundancy payment. The maximum basic award as at the date of this blog is £16,140;
- The compensatory award depends upon the loss you have suffered as result of your dismissal and will include amounts for loss of earnings etc;
- As the compensatory award is intended to compensate you for loss you have suffered, if you have suffered no financial loss (by way of extreme example, you start a new job for the same or more pay the day after your dismissal) then the Employment Tribunal will consider there is little to compensate you for. This does seem incredibly unfair but if there is no loss there is nothing to be compensated;
- At the time of writing, the maximum compensatory award for most unfair dismissal claims is £88.519 or a year’s gross salary – whichever is the lower;
- When preparing your own calculation of your compensatory award, the first stage is to work out your “actual losses”. This takes into account pay and benefits that you have lost. Any money you received including notice and holiday pay should be taken into account. Also, as this is your actual loss, it should be calculated on your net pay;
- The second calculation is an estimate of future losses. You will be under a duty to do all you can to find alternative employment and at the Employment Tribunal you are likely to be required to provide evidence of your efforts to find work. When doing this calculation, be realistic about how long it will take you to find another job;
- The third calculation includes expenses you have incurred in seeking employment including stamps, printing, travel for attending interviews etc;
- The fourth calculation is an award for the loss of the statutory right not to be unfairly dismissed, as you will have to work for another employer for two years to regain those rights. Employment Tribunals add between £350 – £400 to the compensatory award for this loss;
- There are deductions and reductions the Employment Tribunal can make. For example, if they consider there is any fault on your part and your conduct means that a reduction should be applied, they can make that reduction;
- The Employment Tribunal will consider whether you have taken reasonable steps to reduce your loss (for example seeking new employment). If it considers you should have found a new job within a month of your dismissal, it can reduce your compensation accordingly;
- The Employment Tribunal can also consider whether you would have been dismissed fairly anyway. For example, if there is evidence that suggests that regardless of any procedure you would have been dismissed (for example, the company was closing down completely in a redundancy dispute) the Employment Tribunal would take this into account and could reduce your compensation to an amount you would have received had your dismissal been undertaken fairly.
Can Lincs Law Employment Solicitors Help You?
If you are considering an Employment Tribunal claim against your employer, please call for a free, no obligation, telephone consultation on 01522 440512. Alternatively, for more information about who we are and what we do at Lincs Law solicitors, please visit our website at www.lincslaw.co.uk/services/employees
Sally Hubbard,Specialist Employment Solicitor
Lincs Law Employment Solicitors, Lincoln
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