When an employee is wrongfully terminated from their job, they may be entitled to compensation for their unfair dismissal. This compensation is often referred to as the unfair dismissal compensatory award. In this article, we will delve into the details of what this award entails and how it is calculated.
The unfair dismissal compensatory award is a form of financial compensation awarded to an employee who has been unfairly dismissed from their job. This award is separate from any statutory redundancy pay or notice pay that the employee may also be entitled to receive. The purpose of this award is to provide the employee with compensation for the loss of income and other benefits suffered as a result of their unfair dismissal.
In order to qualify for an unfair dismissal compensatory award, the employee must typically have at least two years of continuous service with their employer. There are certain circumstances, however, in which this requirement may be waived, such as if the dismissal was based on discriminatory grounds. It is important to note that an employee cannot receive both their job back and an unfair dismissal compensatory award – they must choose one or the other.
Calculating the unfair dismissal compensatory award can be a complex process, as it takes into account various factors such as the employee’s length of service, age, salary, and future loss of earnings. The award is meant to put the employee back in the position they would have been in had they not been unfairly dismissed. This means that it can include compensation for lost wages, bonuses, benefits, and pension contributions.
In addition to financial compensation, the unfair dismissal compensatory award can also include an amount for injury to feelings. This is intended to compensate the employee for the emotional distress and humiliation they may have experienced as a result of their unfair dismissal. The amount awarded for injury to feelings will vary depending on the severity of the harm caused.
It is important to note that there is a statutory cap on the amount of compensation that can be awarded for unfair dismissal. As of April 2021, the maximum compensatory award for unfair dismissal is £89,493, or 52 weeks’ gross salary, whichever is lower. This cap is subject to change each year, so it is important to check the current regulations when pursuing an unfair dismissal claim.
In some cases, the Employment Tribunal may also consider making a basic award in addition to the compensatory award. The basic award is calculated based on the employee’s length of service, age, and weekly pay, and is subject to a statutory maximum. This award is intended to compensate the employee for the loss of their statutory rights, such as the right to notice and consultation in the event of redundancy.
When determining the amount of the compensatory award, the Employment Tribunal will consider various factors, including the circumstances surrounding the dismissal, the employee’s efforts to mitigate their losses, and any contributory conduct on the part of the employee. It is important for employees to present evidence of their financial losses and emotional distress in order to receive fair compensation.
In conclusion, the unfair dismissal compensatory award is an important form of compensation for employees who have been wrongfully dismissed from their jobs. This award aims to provide financial compensation for the loss of income and other benefits suffered as a result of the unfair dismissal. If you believe you have been unfairly dismissed, it is important to seek legal advice and pursue a claim for compensation. Remember, everyone deserves fair treatment in the workplace, and the law is there to protect your rights.