Unfair dismissal is a term that refers to when an employer terminates an employee’s contract of employment in a way which breaches one or more employment laws. This could be due to discriminatory reasons, without following proper procedure, or for reasons that are not considered fair or valid. When an employee is unfairly dismissed, they may be entitled to compensation in the form of a compensatory award.
The compensatory award is designed to compensate the employee for any financial loss suffered as a result of the unfair dismissal. This can include loss of earnings, benefits, and any other financial losses directly related to the dismissal. The compensatory award is intended to put the employee in the position they would have been in had the unfair dismissal not occurred.
There are limits to how much an employee can receive in a compensatory award for unfair dismissal. In the UK, the maximum compensatory award is currently capped at £89,493 or 52 weeks’ gross pay (whichever is lower). This means that even if an employee can prove that they have suffered significant financial loss as a result of their unfair dismissal, there is a limit to how much they can receive in compensation.
In addition to the compensatory award, an employee who is successful in proving unfair dismissal may also be entitled to a basic award. The basic award is calculated in the same way as statutory redundancy pay and is based on the employee’s age, length of service, and weekly pay. The maximum basic award is currently £16,320.
When deciding on the amount of the compensatory award, an employment tribunal will take into account a number of factors. These can include the employee’s age, length of service, salary, and the likelihood of finding new employment. The tribunal will also consider the conduct of both the employer and the employee in the lead up to the dismissal, as well as any attempts made to resolve the situation through other means.
It is important for employees who believe they have been unfairly dismissed to seek legal advice as soon as possible. An experienced employment lawyer will be able to advise on the strength of the case and the likelihood of success in claiming a compensatory award. They will also be able to guide the employee through the process of making a claim and represent them at any hearings or tribunals.
Employers also have a duty to ensure that they follow proper procedures when dismissing an employee to avoid the risk of facing a claim for unfair dismissal. This includes providing the employee with written reasons for the dismissal, giving the employee the right to appeal the decision, and following any internal procedures or disciplinary policies that are in place.
If an employer is found to have unfairly dismissed an employee, they may be ordered to pay a compensatory award as well as reimbursing the employee for any other financial losses suffered as a result of the dismissal. This can have serious consequences for the employer, both financially and in terms of reputation.
In conclusion, unfair dismissal compensatory awards are designed to compensate employees who have been unfairly dismissed for any financial losses suffered as a result of the dismissal. The amount of the compensatory award will depend on a number of factors, including the employee’s age, length of service, and salary. It is important for employees who believe they have been unfairly dismissed to seek legal advice and guidance on making a claim. Employers also have a responsibility to follow proper procedures when dismissing an employee to avoid the risk of facing a claim for unfair dismissal.