How Much Compensation for Unfair Dismissal from Work?

Author:
David Hession
Employment Law Associate Solicitor
Date:
17/07/2019

Compensation for unfair dismissal is divided into two categories:

  • A basic award and;
  • A compensation award

A basic award is calculated according to your age, length of service and income.

A compensation award reflects the actual financial loss you have incurred because of your dismissal and aims to fully compensate you if your claim is successful, but not to award a bonus.

To find out if your unfair dismissal claim is likely to be awarded compensation, get in touch with our national team of Employment Solicitors.

Call us on 08002605010 or request a callback and we will help you.

Unfair Dismissal Compensation

Unfair dismissal compensation awards vary from case to case. However, it’s always made up of two elements – a basic award and a compensatory award.

Basic Award 

A basic award is calculated according to a set formula. This is the same for each and every unfair dismissal claim.

The calculation depends on your age, the number of complete years you have been employed with the company, and your gross weekly salary. Working back from the date of termination, you will get:

  • 5 weeks’ pay for each complete year of service from the age of 41 and over
  • 1 weeks’ pay for each complete year of service between the ages of 22 and 40
  • Half a weeks’ pay for each complete year of service below the age of 22

As of 6 April 2019, your gross weekly pay for calculating a basic award is capped at £525, even if you usually earn more than this. Also, you cannot claim more than 20 years’ service, even if you have been with your employer for longer.

Because there is a set calculation, you can work out your basic award. There is even an online calculator to help you. The same formula is used for statutory redundancy payments.

Very occasionally, an Employment Tribunal reduces a basic award. This might happen if you have already received redundancy pay. It can also occur if the Employment Tribunal says you have behaved unreasonably. For example, you may be guilty of misconduct, or you may have refused to take your old job back, which the Tribunal considers unreasonable in the circumstances.

Compensation Award 

A compensatory award requires a little more investigation. It’s intended to recover the actual financial loss you have incurred because of your dismissal from work. It’s, therefore, necessary to work out the value of:

  • Your loss of net earnings from the date of dismissal to the date of the hearing;
  • Future loss of earnings;
  • Loss of pension rights;
  • Your other losses, such as overtime, benefits and pension; and
  • Your loss of statutory rights

When making an unfair dismissal claim, your Employment Solicitor will assess your losses. He/she will then propose a suitable compensation settlement taking into account the risks of losing. This can lead to negotiations between you and your employer. Alternatively, the Employment Tribunal can decide how much compensation you should receive.

Like a basic award, there is a maximum amount you can claim for a compensatory award. As of 6 April 2019, you cannot claim more than one year’s gross salary or £86,444 – whichever is lower.

You can claim losses while you are looking for another job as part of your future loss of earnings. The Employment Tribunal will want to see evidence that you are trying your best to secure new employment. If the Employment Tribunal considers you are not making every effort to find another job, or that you have unreasonably refused to take up an offer of employment your compensation can be reduced.

Also, the Employment Tribunal has the discretion to reduce or increase your compensation award. For example, it might be increased if your employer failed to follow the correct disciplinary procedure, or it may be reduced if you did not follow the grievance procedure in the case of constructive dismissal. Your compensation may also be reduced if the Employment Tribunal finds that you contributed to your dismissal.

Our Employment Solicitors Can Help You

If you have been unfairly dismissed from your job, one of our Employment Solicitors can explain your options in greater detail, suggesting the best approach in your case. If you have already received redundancy pay, it may not be suitable to pursue an unfair dismissal claim. Otherwise, you might want to consider taking legal action.

If you would like to make an unfair dismissal claim, our Employment Solicitors can act on your behalf. We will work hard to get you the maximum amount of compensation for the losses you have suffered because of your dismissal. 

For free initial legal advice call our Employment Solicitors

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