When an employee is unjustly terminated from their job, the law provides remedies to compensate for the unfair dismissal One of these remedies is a compensatory award, which aims to make the employee whole again for the loss they have suffered as a result of the unfair dismissal In this article, we will delve into the intricacies of compensatory awards for unfair dismissal.
Unfair dismissal occurs when an employer terminates an employee’s contract of employment without a valid reason or in a manner that is considered harsh, unjust, or unreasonable This can include situations where an employee is fired for reasons such as their gender, race, age, or disability, or for exercising their legal rights, such as whistleblowing or taking maternity leave When an employee believes they have been unfairly dismissed, they may choose to file a claim with an employment tribunal.
If the employment tribunal finds that the dismissal was unfair, they may award the employee compensation in the form of a compensatory award The purpose of the compensatory award is to financially compensate the employee for the loss they have suffered as a result of the unfair dismissal This can include lost wages, benefits, and any other financial losses incurred as a result of the termination of their employment.
Calculating the compensatory award can be a complex process, as it involves assessing the financial losses suffered by the employee as a result of the unfair dismissal The amount of the compensatory award will vary depending on factors such as the employee’s length of service, their salary, and the circumstances surrounding their dismissal In some cases, the compensatory award may also include an amount for injury to feelings if the employee has suffered emotional distress as a result of the unfair dismissal.
In addition to the compensatory award, the employment tribunal may also award the employee a basic award, which is a statutory amount based on the employee’s length of service and age compensatory award unfair dismissal. The basic award is intended to compensate the employee for the unfair dismissal itself and is calculated based on a set formula set out in the Employment Rights Act 1996.
It is important to note that there are limits on the amount of compensation that can be awarded in unfair dismissal cases Currently, the maximum compensatory award for unfair dismissal is capped at £89,493 (as of April 2021), although this amount may be adjusted annually The compensatory award is also subject to a cap of 52 weeks’ pay, which means that it cannot exceed the employee’s annual salary.
In some cases, the employment tribunal may reduce the amount of the compensatory award if they find that the employee contributed to their dismissal in some way This is known as a reduction for contributory fault and can result in a lower compensatory award being awarded to the employee.
In conclusion, a compensatory award for unfair dismissal is a remedy available to employees who have been unjustly terminated from their employment The purpose of the compensatory award is to financially compensate the employee for the loss they have suffered as a result of the unfair dismissal Calculating the amount of the compensatory award can be a complex process, as it involves assessing the financial losses suffered by the employee It is important for employees who believe they have been unfairly dismissed to seek legal advice and consider filing a claim with an employment tribunal to seek compensation for their unfair dismissal.