The unfair dismissal compensatory award, commonly known as the compensatory award, is a financial settlement given to an employee who has been unfairly dismissed by their employer. This award aims to compensate the employee for the financial loss and emotional distress caused by the unfair dismissal. In this article, we will delve deeper into what the compensatory award entails, how it is calculated, and what factors are considered in determining the amount awarded to the employee.
When an employee is dismissed from their job without a valid reason or without following the proper procedures set out in employment law, it is considered an unfair dismissal. In such cases, the employee has the right to challenge the dismissal and seek compensation through an employment tribunal. The compensatory award is one of the remedies available to employees who have been unfairly dismissed.
The compensatory award is designed to put the employee back in the position they would have been in if they had not been unfairly dismissed. This includes compensating the employee for loss of earnings, benefits, and any other financial losses incurred as a result of the dismissal. In addition to financial compensation, the award also takes into account the emotional distress and impact on the employee’s career prospects caused by the unfair dismissal.
Calculating the compensatory award can be a complex process, as it involves taking into consideration various factors such as the length of the employee’s service, their age, salary, and the circumstances of the dismissal. The tribunal will also consider any efforts made by the employee to mitigate their losses by finding alternative employment. In some cases, the compensatory award may be reduced if the tribunal finds that the employee contributed to their dismissal or failed to take reasonable steps to find another job.
There is no set formula for calculating the compensatory award, as each case is unique and factors such as the employee’s individual circumstances and the impact of the unfair dismissal on their life will be taken into account. However, there are statutory limits in place to prevent excessive awards. As of April 2021, the maximum compensatory award that can be awarded is £89,493 or 52 weeks’ gross pay, whichever is lower.
In addition to the compensatory award, employees who have been unfairly dismissed may also be entitled to a basic award, which is calculated based on the employee’s age, length of service, and weekly pay. The basic award is separate from the compensatory award and is intended to provide compensation for the loss of job security and statutory rights resulting from the unfair dismissal.
Employment tribunals have the discretion to adjust the amount of the compensatory award based on the specific circumstances of the case. Factors such as the employer’s conduct during the dismissal process, any discrimination or victimization suffered by the employee, and the financial impact of the dismissal on the employee’s life will all be taken into consideration when determining the amount of the award.
It is important for employees who believe they have been unfairly dismissed to seek legal advice and explore their options for challenging the dismissal and seeking compensation. Employment tribunals are impartial bodies that can help to resolve disputes between employees and employers and ensure that employees receive fair treatment under the law.
Overall, the unfair dismissal compensatory award is a vital remedy that provides financial compensation to employees who have been unfairly dismissed from their jobs. It aims to restore the employee to the position they would have been in if the unfair dismissal had not occurred and recognizes the impact of the dismissal on the employee’s life and career. By understanding the compensatory award and seeking legal advice when needed, employees can assert their rights and seek justice for unfair treatment in the workplace.