unfair dismissal compensatory award, often referred to simply as compensation, is a financial remedy awarded to employees who have been unfairly dismissed from their jobs. This award aims to provide some form of redress to employees who have suffered financial loss as a result of their dismissal. In this article, we will delve deeper into the concept of unfair dismissal compensatory award, exploring what it entails, how it is calculated, and the factors that come into play when determining the amount awarded.
Unfair dismissal occurs when an employee is dismissed from their job in a manner that is considered to be unjust, unreasonable, or disproportionate. This can include dismissals that are based on discriminatory grounds, such as race, gender, age, or disability, as well as dismissals that are carried out without following the proper procedures or for reasons that are not valid. In such cases, the employee may be entitled to compensation in the form of a compensatory award.
When it comes to calculating the amount of the compensatory award, several factors are taken into consideration. These include the employee’s age, length of service, salary, and the likelihood of finding another job. The purpose of the compensatory award is to put the employee in the position they would have been in had they not been unfairly dismissed. This means that the award aims to cover the financial losses suffered by the employee as a result of their dismissal.
In determining the amount of the compensatory award, the Employment Tribunal will consider both the actual financial losses suffered by the employee, such as loss of earnings and benefits, as well as the future losses that the employee is likely to incur as a result of their dismissal. Additionally, the Tribunal may take into account any non-financial losses suffered by the employee, such as loss of reputation, emotional distress, and inconvenience.
The compensatory award is subject to a statutory cap, which is updated annually. The current cap stands at £89,493 or 52 weeks’ gross pay, whichever is lower. However, in exceptional cases, the Tribunal may exceed this cap if it deems it necessary to provide adequate compensation to the employee.
In addition to the compensatory award, employees who have been unfairly dismissed may also be entitled to receive a basic award, which is calculated based on the employee’s age, length of service, and weekly pay. The basic award is subject to a maximum cap, which is currently set at £16,320. This award is intended to provide further compensation to employees who have been unfairly dismissed.
It is important to note that employees who have been unfairly dismissed are required to mitigate their losses by actively seeking alternative employment. Failure to do so may result in a reduction of the compensatory award, as the Tribunal may deem that the employee has not taken reasonable steps to lessen their financial losses.
In conclusion, unfair dismissal compensatory award is a financial remedy that aims to compensate employees who have been unfairly dismissed from their jobs. The award is calculated based on various factors, including the employee’s age, length of service, salary, and the financial and non-financial losses suffered as a result of the dismissal. While there is a statutory cap on the compensatory award, the Tribunal may exceed this cap in exceptional circumstances to ensure that the employee receives adequate compensation. Employees who have been unfairly dismissed should seek legal advice to understand their rights and entitlements regarding the compensatory award.
In summary, unfair dismissal compensatory award is a crucial aspect of employment law that aims to provide financial redress to employees who have been unfairly dismissed. By understanding the factors that come into play when determining the amount of the compensatory award, employees can better navigate the process and seek the compensation they rightfully deserve.