Compensation Guide

Last updated: 13th May 2021

Employment Compensation

If an Employment Tribunal concludes that you have been unfairly dismissed, you will be entitled to compensation.

The compensation that you will be awarded is calculated, very broadly, as follows.

Basic Award

You will receive a basic award which is calculated as follows:

  • Half a week’s pay for each year of employment in which the employee was aged 21 or younger;
  • A week’s pay for each year of employment in which the employee was aged between 22 and 40;
  • One and a half week’s pay for each year of employment in which the employee was 41 or older.

The gross weekly pay is however, subject to a statutory cap of £544 (as at April 2021). And, the maximum basic award for an unfair dismissal claim is capped at £16,320.

Compensatory Award

In addition to this, the Tribunal may award you what is known as a compensatory award. This award is defined as “such an amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the Complainant in consequence of the dismissal in so far as the loss is attributable to the action taken by the employer“.

When calculating this award, the Tribunal will firstly award compensation for the employee’s loss of statutory rights in the sum of £250.

Secondly, the Tribunal will look at whether the employee has lost any earnings as a result of his or her unfair dismissal. The Tribunal will consider whether or not the employee has found alternative employment by the date of the Tribunal. If no alternative employment has been secured, the Tribunal has discretion to make an award for future loss of earnings. To do this, the Tribunal will take a view as to how long it will take the Complainant to find alternative employment.

The Tribunal will also take into account any payments that the Claimant has received from the employer, for example an ex gracia payment or any payment in lieu of notice or earnings from alternative employment.

If the dismissal was unfair for technical reasons, normally as a result of the employer’s failure to follow correct procedure, the Tribunal will also consider whether or not the employee was likely to have been dismissed in any event.

The Tribunal will also consider adjusting any compensatory award if either party has failed to comply with the new ACAS code.

Employees often complain that they have not been provided with a written statement of employment particulars. In these circumstances, the Tribunal will award the employee at least two weeks pay for such a failure.

If the Tribunal concludes that the employee’s conduct has contributed to his dismissal, the Tribunal has discretion to decrease any award to the extent it considers just and equitable.

If a Tribunal finds that you have been discriminated against, the Tribunal is likely to make an award for injury to feelings.

Finally, if the Tribunal concludes that you have been unfairly dismissed without notice, it may be order your employer to pay you the notice that you were entitled to.


Personal Injury and Medical Negligence Compensation

Broadly speaking, if a party is successful in a personal injury claim, they will receive two categories of damages; general damages and special damages.

General Damages

General damages are damages which a Claimant receives for pain, suffering and loss of amenity following an injury. The level of general damages is assessed by reference, firstly to guidelines which have been issued by the judiciary (the Judicial Studies Board Guidelines) which broadly categories each type of injury and gives a range of damages which the injured party can expect to receive in relation to each injury, and secondly, by reference to case law (i.e. previous legal cases). When considering case law, it is often possible to identify a previous legal case which has a similar factual background.

Special Damages

Special damages are the damages which an injured party receives for all other loss which he or she incurred which is attributable to the injury. Common categories of special damages are travelling expenses to and from doctors and hospitals; expenditure on medicines and medical equipment; the time a husband or wife or family member has spent caring for the injured party during their recovery; and often most importantly, loss of earnings.