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Ask Employment Law |
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Remember: There is no substitute for legal advice on the actual
situation you find yourself in. The information posted on this site is for
general information only, is based on |
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Question: |
How much will an (ex) employee get if s/he wins an unfair
dismissal
claim?
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Answer: |
The
calculation of losses is not a straight forward matter. This is simply a
summary of the kind of issues that may be covered in a compensatory award
made by a Tribunal. The Tribunal may reduce elements of the award by up to
100% in exceptional circumstances (for example contribution to one’s own
dismissal) which I shall not delve into here. The
main purpose of an award of damages is to put the employee back in the
position that he or she would have been had s/he not been unfairly dismissed.
This is the object of the Compensatory Award: Compensatory Award: The
compensatory award compensates the employee for the loss of net earnings,
benefits etc from the date of dismissal until the date that s/he finds
suitable alternative employment. The employee will have to show what steps
s/he has taken to find suitable alternative employment by producing letters,
emails, application forms, rejection letters etc showing that /she has
actually been actively looking for another job (rather than sitting at home
waiting for the Tribunal to make it’s award). This is likely to comprise of: -
Loss of net pay (after deductions of tax and
national insurance) for the number of weeks the employee has been out of work
to the date of the Tribunal Hearing. For example, Bob is out of work for
three months, before finding another job earning as much as before. If he
earned £2,000 per month after tax, and was out of work for 6 months, his loss
hear would be £6,000, -
Loss of net pay (after deductions) from the
hearing date until the date the employee is expected to have found suitable
alternative employment (not normally more than 6 months) -
Loss of other benefits (for example health
insurance etc) for the same period. -
Loss of pension rights (this can be difficult
to calculate) for the same period. -
Costs associated with finding another job
(such as travel, stationary etc) -
Loss of ‘statutory rights’ (normally up to
£250). This recognises the fact that s/he will have to work in the new job
for a year before getting statutory protection from unfair dismissal) Compensatory
awards for most people are not great, and are unlikely to approach the
statutory cap (currently £65,300 from the 1st February 2010). Some older people may argue that
they will effectively be out of work until their retirement date, but
Tribunals are reluctant to accept such an argument without compelling
evidence. High earners may feel that
the statutory cap for compensatory awards means that they cannot recover all
of their losses when bringing an unfair dismissal claim. Basic
Award: The basic
statutory award on unfair dismissal largely the same as a statutory
redundancy payment. However entitlement arises after one year’s employment. This will be a week’s pay to a maximum of £380 before tax
(reviewed annually in October of each year)) x full years worked x 1.5 for
years worked over the age of 41. There’s also a slight variation for years
worked under the age of 21. For a ‘Ready Reckoner’ see http://www.direct.gov.uk/redundancy.dsb or do a web search for ‘redundancy ready
reckoner’ Injury to Feelings: Tribunals
will not make an award of ‘injury to feelings’ in statutory claims of unfair dismissal.
However awards for injury to feelings may be made for unlawful discrimination
(see the page on injury to
feelings) Last
reviewed: July 2010 |
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Employment
Solicitor Reculver Solicitors Tel
0207 324 6271 Regulated
by the Solicitors Regulation Authority ©
Reculver Solicitors. 2005- |
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