The elements that make up the award are:
Loss of wages up to the date of the Tribunal hearing
This covers the period from the end of the notice period (or dismissal) to the date of the Tribunal hearing,less any earnings from new employment, or to the start date of a new job if higher paid.
Future Loss of Wages
As estimated by the Tribunal. If a new job has been found then this element is not included unless the employee’s new employment pays less, in which case the Tribunal estimates this future loss. Most Tribunals will award between 6 and 12 months’ future loss, although in some cases Tribunals can award significantly more.
Loss of Associated Benefits
Loss of car, health benefits, share options, pension loss, etc.
Loss of Employment Protection (Statutory Rights)
Usually anything between £250 to £700.
Loss of pension rights /contributions Expenses in seeking work
Case law has now established that there is no compensation payable for stress or injury to feelings in unfair dismissal claims.
Unfair Dismissal – Reduction in the Compensatory Award
The employee is under a duty to take reasonable steps to reduce his/her loss by gaining alternative employment as soon as possible. This is called “mitigation”. Any failure to mitigate will limit loss of earnings awarded.
Any conduct on the part of the employee before the dismissal, which contributed to that dismissal, may lead to the compensation being reduced.
In any circumstances where the Tribunal considers it just and equitable to reduce the Compensatory Award, it may do so. This may sometimes be seen where the employer discovers after the dismissal that the employee was guilty of some serious misconduct other than that which he/she was dismissed for.
If the dismissal is held to be procedurally unfair, the Tribunal will ask itself the question whether this failure would ultimately have made any difference to the outcome. If not, then compensation will be limited to the period it would have taken for a proper procedure to take place before a fair dismissal could have occurred. This is commonly known as a “Polkey” reduction.
An additional award is made if the employer fails to comply with an order made by the Tribunal for reinstatement or re-engagement unless the employer satisfies the Tribunal that it was not practicable to comply.
If the Tribunal orders the employee be reinstated and the employer fails to carry out this Order, an additional award of between 26 and 52 weeks’ pay can be made at a maximum of £489 per week (from 6th April 2017).