In the world of employment law, one of the most common issues that employees face is unfair dismissal. When an employee believes that they have been dismissed unfairly, they have the right to take their case to an employment tribunal in order to seek justice. If the tribunal finds in favor of the employee, they may be entitled to an award of compensation. In this article, we will explore the criteria for determining the amount of compensation awarded in cases of unfair dismissal.
Unfair dismissal occurs when an employee is dismissed from their job in a way that is considered to be harsh, unjust or unreasonable. Examples of unfair dismissal include being fired for a discriminatory reason, being dismissed without proper notice, or being dismissed without a fair reason. It is important to note that there are strict time limits for bringing a claim of unfair dismissal to an employment tribunal, so employees must act quickly if they believe they have been unfairly dismissed.
When an employment tribunal determines that an employee has been unfairly dismissed, they have the power to award compensation to the employee. The amount of compensation awarded will depend on a number of factors, including the length of the employee’s service, the circumstances of their dismissal, and the financial losses they have suffered as a result of being unfairly dismissed.
In cases of unfair dismissal, compensation can be broken down into two main categories: the basic award and the compensatory award. The basic award is calculated based on the employee’s age, length of service, and weekly pay, up to a maximum limit set by the government. The compensatory award, on the other hand, is intended to compensate the employee for any financial losses they have suffered as a result of their dismissal, such as loss of earnings, loss of benefits, and loss of pension contributions.
In addition to the basic and compensatory awards, employment tribunals may also award additional compensation in cases of unfair dismissal. This additional compensation, known as a ‘Polkey award’, is named after the case of Polkey v AE Dayton Services Ltd, and is intended to compensate employees for the unfair way in which they were dismissed. For example, if an employee was dismissed without proper notice or without being given the opportunity to appeal, the tribunal may decide to award a Polkey award to compensate the employee for these unfair practices.
When determining the amount of compensation to be awarded in cases of unfair dismissal, employment tribunals are guided by established principles and precedents. These principles include the idea that the compensation should be ‘just and equitable’, and that it should be sufficient to compensate the employee for the losses they have suffered. Tribunals may also take into account factors such as the employee’s efforts to mitigate their losses, the availability of alternative employment, and the conduct of the parties during the dismissal process.
It is worth noting that there are limits on the amount of compensation that can be awarded in cases of unfair dismissal. For example, the compensatory award is subject to a statutory cap, which is adjusted annually by the government. In addition, there are limits on the amount of compensation that can be awarded for loss of earnings and loss of benefits. These limits are intended to ensure that the compensation awarded is proportionate to the losses suffered by the employee.
In conclusion, employment tribunal awards for unfair dismissal are intended to compensate employees who have been unfairly dismissed from their jobs. The amount of compensation awarded will depend on a number of factors, including the employee’s length of service, the circumstances of their dismissal, and the financial losses they have suffered. While there are limits on the amount of compensation that can be awarded, employment tribunals will strive to ensure that the compensation is just and equitable. Employees who believe they have been unfairly dismissed should seek legal advice and consider taking their case to an employment tribunal in order to seek justice.