In the world of employment law, unfair dismissal is one of the most common reasons for employees to take their employers to a tribunal. When an employee feels that they have been unfairly dismissed from their job, they have the right to challenge this decision in an employment tribunal. If successful, they may receive an award in the form of compensation for their unfair dismissal.
The amount of compensation awarded in unfair dismissal cases can vary greatly depending on the circumstances of the case. Factors such as the length of the employee’s service, their salary, and the reasons for their dismissal will all be taken into account when determining the amount of compensation to be awarded.
In the UK, the amount of compensation awarded in unfair dismissal cases is capped at a maximum of £88,519 or 52 weeks’ pay, whichever is lower. This cap is subject to change each year in line with inflation.
When an employee is successful in their claim for unfair dismissal, they may be awarded two different types of compensation – a basic award and a compensatory award.
The basic award is calculated based on the employee’s age, length of service, and weekly pay. The formula for calculating the basic award is as follows:
– Half a week’s pay for each year of service under the age of 22
– One week’s pay for each year of service between the ages of 22 and 41
– One and a half week’s pay for each year of service over the age of 41
The compensatory award, on the other hand, is designed to compensate the employee for any financial losses they have suffered as a result of their unfair dismissal. This can include lost earnings, loss of benefits, and any other financial losses incurred as a result of the dismissal.
In addition to the basic award and the compensatory award, the employment tribunal may also choose to award the employee additional compensation in the form of a “Polkey deduction”. This deduction is made if the tribunal believes that the employee would have been dismissed fairly anyway, even if the proper procedures had been followed.
It is important to note that employment tribunal awards for unfair dismissal are not intended to punish the employer, but rather to compensate the employee for the losses they have suffered as a result of their unfair dismissal. The aim is to put the employee back in the position they would have been in had they not been unfairly dismissed.
Employers should take care to follow the correct procedures when dismissing an employee to avoid the risk of an unfair dismissal claim being brought against them. By ensuring that the proper procedures are followed and that the reasons for dismissal are fair and reasonable, employers can reduce the likelihood of having to pay compensation to an unfairly dismissed employee.
In conclusion, employment tribunal awards for unfair dismissal are an important form of protection for employees who have been unfairly treated by their employers. The awards are designed to compensate employees for the losses they have suffered as a result of their unfair dismissal and to ensure that they are not left out of pocket as a result of their employer’s actions. Employers should take care to follow the correct procedures when dismissing an employee to avoid the risk of an unfair dismissal claim being brought against them.