Employees have certain rights when it comes to their employment, one of which is protection from unfair dismissal. In cases where an employee is wrongfully terminated from their job, they may be entitled to compensation in the form of a compensatory award. This award is designed to compensate the employee for any losses suffered as a result of their unfair dismissal. In this article, we will take a closer look at the unfair dismissal compensatory award and what it entails.
First and foremost, it is important to understand what constitutes unfair dismissal. According to the law, a dismissal is considered unfair if it is deemed to be both procedurally and substantively unfair. Procedural unfairness refers to the manner in which the dismissal was executed, such as failing to follow proper termination procedures or failing to provide the employee with a fair hearing. Substantive unfairness, on the other hand, relates to the reasons for the dismissal, such as discrimination, retaliation, or other unlawful grounds.
If an employee believes that they have been unfairly dismissed, they have the right to file a claim with an employment tribunal. The tribunal will then evaluate the circumstances of the case and determine whether the dismissal was indeed unfair. If the tribunal rules in favor of the employee, they may be awarded a compensatory award as a form of redress for the losses they have incurred.
The compensatory award is meant to compensate the employee for both financial and non-financial losses resulting from the unfair dismissal. Financial losses may include lost wages, benefits, and bonuses, as well as any expenses incurred as a direct result of the dismissal. Non-financial losses, on the other hand, may include the emotional distress, reputational damage, or other intangible harm suffered by the employee as a result of the unfair dismissal.
When calculating the compensatory award, the tribunal will take into consideration various factors, such as the employee’s length of service, age, salary, and future job prospects. The goal is to ensure that the employee is adequately compensated for the losses they have suffered, and to put them in a position as close as possible to where they would have been had they not been unfairly dismissed.
It is important to note that there are limits to the amount of compensation that can be awarded in an unfair dismissal case. The compensatory award is subject to a statutory cap, which is adjusted annually. As of 2021, the maximum compensatory award for unfair dismissal is £88,519, or the equivalent of 52 weeks’ pay, whichever is lower. This means that even if the employee can prove significant losses as a result of their unfair dismissal, they may not be awarded more than the statutory cap.
In addition to the compensatory award, employees may also be entitled to other forms of compensation in an unfair dismissal case. For example, they may be awarded a basic award, which is based on their length of service and salary, as well as any other contractual entitlements they may have. They may also be entitled to reimbursement of legal fees incurred in pursuing their claim, as well as interest on any unpaid wages or benefits.
Overall, the unfair dismissal compensatory award is an important form of redress for employees who have been wrongfully terminated from their jobs. It is designed to compensate them for the losses they have incurred as a result of the unfair dismissal, and to ensure that they are not left financially or emotionally worse off as a result of their employer’s actions. By understanding their rights and seeking legal advice when necessary, employees can ensure that they receive fair treatment in the event of an unfair dismissal.