Understanding The Unfair Dismissal Compensatory Award

When an employee is dismissed from their job in a manner that is considered unfair or unjust, they may be entitled to receive a compensatory award as a form of redress for the wrongful termination This compensatory award is designed to compensate the employee for the losses they have suffered as a result of the unfair dismissal, both financial and non-financial In this article, we will explore what constitutes unfair dismissal, how the compensatory award is calculated, and what factors are taken into account when determining the amount of the award.

Unfair dismissal occurs when an employee is dismissed from their job in a way that is considered to be harsh, unjust, or unreasonable This can include being terminated for reasons that are discriminatory, retaliatory, or in violation of employment laws or regulations Common examples of unfair dismissal include being fired for whistleblowing, taking maternity leave, or for reporting workplace harassment or discrimination.

In cases of unfair dismissal, an employment tribunal may award the employee a compensatory award to make up for the losses they have suffered as a result of the wrongful termination The purpose of the compensatory award is to put the employee back in the position they would have been in had they not been unfairly dismissed This can include lost wages, benefits, and any other financial losses incurred as a result of the dismissal.

The amount of the compensatory award is calculated based on a number of factors, including the employee’s length of service, age, salary, and the circumstances surrounding the dismissal In the UK, there is a statutory cap on the compensatory award which is currently set at £88,519 or 52 weeks’ pay, whichever is lower unfair dismissal compensatory award. This cap was introduced to prevent excessive awards and to provide a degree of certainty for both employers and employees.

When determining the amount of the compensatory award, the employment tribunal will take into account a number of factors, including the employee’s efforts to mitigate their losses by finding alternative employment, the availability of suitable job opportunities in the local market, and the efforts made by the employer to help the employee find a new job The tribunal will also consider any financial losses incurred by the employee, such as loss of income, benefits, and pension contributions.

In addition to financial losses, the employment tribunal may also award compensation for non-financial losses, such as injury to feelings, loss of reputation, and emotional distress caused by the unfair dismissal This type of compensation is known as a ‘basic’ or ‘additional’ award and is intended to reflect the impact of the dismissal on the employee’s mental and emotional well-being.

It is important to note that the compensatory award is separate from any other awards or damages that may be awarded in a wrongful dismissal claim, such as a claim for breach of contract or discrimination The compensatory award is specifically designed to compensate the employee for the losses they have suffered as a result of the unfair dismissal, rather than to punish the employer for their actions.

In conclusion, the compensatory award is a vital form of redress for employees who have been unfairly dismissed from their jobs By compensating employees for the losses they have suffered as a result of the wrongful termination, the compensatory award helps to ensure that employees are treated fairly and justly in the workplace If you believe you have been unfairly dismissed from your job, it is important to seek legal advice to determine your rights and entitlements to a compensatory award.