Employees are protected by various employment laws that ensure they are treated fairly and lawfully by their employers. One such protection is the right to fair dismissal, which means employees cannot be dismissed without a valid reason and following a fair procedure. However, there are cases where employees are unfairly dismissed, leading to emotional distress, financial hardship, and loss of job security. In these situations, employees may be entitled to a compensatory award for unfair dismissal.
The compensatory award for unfair dismissal is a monetary award given to employees who have been unfairly dismissed by their employers. This award is intended to compensate the employee for the losses they have suffered as a result of the unfair dismissal, both financial and non-financial. It is important to note that the compensatory award is separate from any notice pay or redundancy payment that the employer may owe the employee.
In order to claim a compensatory award for unfair dismissal, the employee must first demonstrate that they have been unfairly dismissed. Unfair dismissal can occur in various ways, such as being dismissed without a valid reason, being dismissed due to discrimination, or being dismissed without following the proper dismissal procedure. Once it is established that the dismissal was unfair, the employee can submit a claim for a compensatory award to an employment tribunal.
When determining the amount of the compensatory award, the tribunal will take into account various factors, including the length of the employee’s service, the employee’s age and salary, the circumstances surrounding the dismissal, and the impact of the dismissal on the employee’s future job prospects. The aim of the compensatory award is to put the employee in the position they would have been in if they had not been unfairly dismissed.
In addition to the compensatory award, employees may also be entitled to a basic award, which is a statutory payment based on the employee’s age, length of service, and weekly pay. The basic award is intended to compensate the employee for the loss of their job security and is separate from the compensatory award.
It is important to note that there is a cap on the amount of the compensatory award that an employee can receive for unfair dismissal. As of 2021, the maximum compensatory award is £88,519 or 52 weeks’ pay, whichever is lower. This cap is in place to prevent excessive claims and ensure that the compensatory award is fair and proportionate.
Employers should be aware of their obligations when it comes to dismissing employees to avoid facing a claim for unfair dismissal. Employers must have a valid reason for dismissal, such as misconduct, poor performance, redundancy, or another substantial reason. Employers must also follow a fair dismissal procedure, which may include giving the employee notice of dismissal, conducting a proper investigation, holding a disciplinary hearing, and giving the employee the opportunity to appeal the decision.
If an employer fails to follow the correct dismissal procedure or unfairly dismisses an employee, they may be liable for a compensatory award for unfair dismissal. In addition to the financial cost of the compensatory award, employers may also face damage to their reputation and potential legal action, which can be costly and time-consuming.
In conclusion, the compensatory award for unfair dismissal is a crucial protection for employees who have been unfairly dismissed from their jobs. This monetary award aims to compensate the employee for the losses they have suffered as a result of the unfair dismissal and to ensure that they are treated fairly by their employers. Employers must be aware of their obligations when it comes to dismissing employees to avoid facing a claim for unfair dismissal and potential financial and legal consequences.