When an employee feels that they have been unfairly dismissed from their job, they have the option to take their case to an employment tribunal. If the tribunal finds that the dismissal was, in fact, unfair, they may award compensation to the employee. These awards can vary greatly depending on the circumstances of the case and the losses suffered by the employee.
Unfair dismissal occurs when an employer terminates an employee’s contract in a way that is considered to be harsh, unreasonable, or inappropriate. This could be due to discriminatory reasons, such as race, gender, age, or disability, or it could be for reasons related to pregnancy, whistleblowing, or for asserting one’s statutory rights.
When an employee believes they have been unfairly dismissed, they have three months from the effective date of termination to bring a claim to an employment tribunal. The tribunal will then decide whether the dismissal was fair or unfair based on the evidence presented by both parties.
If the tribunal finds that the dismissal was unfair, they will then determine what compensation, if any, should be awarded to the employee. This compensation is meant to make up for the financial losses suffered by the employee as a result of the unfair dismissal.
There are two types of compensation that can be awarded in unfair dismissal cases: basic awards and compensatory awards. The basic award is calculated based on the employee’s length of service, their age, and their weekly pay. It is intended to compensate the employee for their loss of employment and is capped at £16,140.
The compensatory award, on the other hand, is intended to compensate the employee for their actual financial loss. This includes lost earnings, future loss of earnings, pension loss, and other benefits that the employee would have received if they had not been unfairly dismissed. The compensatory award is uncapped but is subject to a statutory maximum of £89,493 or a lower cap based on the employee’s annual salary.
In addition to these two types of awards, the tribunal may also award a sum for injury to feelings, also known as a “Vento award”. These awards are intended to compensate the employee for the emotional distress and loss of dignity they suffered as a result of the unfair dismissal. The amount of the award will depend on the severity of the emotional distress suffered by the employee and can range from £900 to £45,000.
It is important to note that the tribunal has the discretion to reduce the amount of compensation awarded if they believe that the employee contributed to their dismissal in any way. This is known as contributory fault and can result in a reduction of up to 100% of the compensation awarded.
In some cases, the tribunal may also order the employer to reinstate or re-engage the employee. Reinstatement involves putting the employee back in their original job, while re-engagement involves offering the employee a different job within the same organization. If the employer refuses to comply with the tribunal’s order, they may be required to pay additional compensation to the employee.
Overall, employment tribunal awards for unfair dismissal can vary greatly depending on the circumstances of the case and the losses suffered by the employee. It is important for both employees and employers to understand their rights and obligations in unfair dismissal cases to ensure a fair outcome for all parties involved.