Unfair Dismissal Calculator: How Much Compensation Will I Receive



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Unfair Dismissal Calculator: How Much Compensation Will I Receive

When making an unfair dismissal claim one important thing to consider is the amount of compensation that you are going to receive. When a Tribunal is awarding compensation this is split up into two main sections which are the basic award and the compensatory award. The basic award can be calculated accurately  however it is the compensatory award that any unfair dismissal calculator might have trouble pinning down to an exact figure.

Basic Award

This will be calculated on the length of service of the individual and it is a fixed formula. This formula is laid out in the Employment Rights Act 1996 and equates to Age Factor x Service x Week’s Pay.[1]  How the age factor is calculated depends on your age and is broken down below:

  • Any full year service where the employee was 41 and over the factor is 1.5
  • Any full year service between the ages of 22 and 41 the factor is 1
  • Any full year service below the age of 22 the factor is 0.5

It should be noted that there is a cap on years of service set at 20 years and the current week’s pay figure is capped at £450 per week.

The examples below should help to illustrate the calculations.

Compensatory Award

This is where things can get a bit tricky as there are no hard and fast rules for how much a claimant will receive if they are successful within their claim of unfair dismissal. The basis for the award is laid out in s.126 Employment Rights Act in which the tribunal will award to the successful Claimant an amount that is ‘just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal’[2]

At present the cap for the maximum compensatory award in unfair dismissal claims is set at £74,200.[3] or 52 weeks wages whichever is lower. However it is rare for a claim to reach this level of compensation. The average level of compensation for 2011/2012 stands at £9,133 with the median award sitting at £4,560.[4]

The elements that can make up this award include

  • Current loss of wages: This is up to the date of the tribunal or till the start of a higher paid job if it’s before the tribunal date (this can often be given an exact figure as you know exactly how much you should have earnt in this time.). Any earnings received prior to this date will be subtracted from this value;
  • Future losses: This is estimated by the tribunal and depending on the job that you have lost this will normally equate to between 6 and 12 month losses. Again if you are on a lower paid job then any earnings will be subtracted from this value and if you are in a higher paid job it is doubtful you will get any compensation in this category;
  • Loss of benefits: This can include company car, health options, pension benefits etc.

So because these are all quite variable it is hard to put an exact figure on the value you are likely to receive if successful and why any unfair dismissal calculator will never necessarily give the same answer as another. To gain a rough figure for your compensatory award if you are yet to find a new job then take the wage loss from your dismissal till the tribunal and then a further 6 months loss after that.

Reductions to Compensatory Awards

The Tribunal also has the power to reduce your compensatory award as well.

You have a duty following your dismissal to mitigate your losses. This means that you should be out there looking for work whilst also pursuing your claim for unfair dismissal. If it can be shown that you weren’t mitigating your loss sufficiently the tribunal might reduce the compensation that is awarded.

They can reduce the compensation if even though the dismissal was unfair you contributed to your dismissal.[4]

Thirdly if the Tribunal viewed the dismissal as procedurally unfair they can look at whether if the correct procedure was followed you would have been dismissed. If they feel that this is the case then it is likely your compensation will be completely negated apart from for the amount of time it would have taken to complete the correct procedure.

What next?

If you have been dismissed and you are considering making a claim for unfair dismissal but aren’t sure exactly what you could receive then do not hesitate to contact us on 0800 014 8727. We can offer free advice on what your claim is worth and whether it is worth making a claim.