It is often confusing for the employee bringing a claim for unfair dismissal and the employer fighting one to know what the value of the claim, if successful, will be.
If a claim for unfair dismissal succeeds the Tribunal will consider an award under two distinct headings; the basic award; and the compensatory award. We will look at the compensatory award in a later blog but first, as a Tribunal might, let’s consider the basic award.
The basic award is normally fairly easy to assess because it is based on a statutory calculation which is the same as the calculation for a statutory redundancy payment. In other words, the basic award is calculated in accordance with the following formula:-
A = Number of complete years of continuous service with employer
B = Age factor – this will be:
- 0.5 for each year of service under the age of 22;
- 1 for each year of service between the ages of 22 and 40;
- 1.5 for each of service over the age of 41.
C = One weeks’ gross pay – this is capped at an amount which normally varied each year by the Government. The current capped amount is £430 per week. If gross salary is less than this figure than it is the lower figure that is used.
Then the formula is:-
A x B x C = the basic award calculation
Although most successful unfair dismissal claimants will receive the full basic award it is not necessarily so simple. The Tribunal can reduce the amount awarded if the employee has unreasonably refused an offer by the employer of reinstatement into his/her role or if the Tribunal considers the conduct of the employee before dismissal justifies a reduction e.g. if the employee was discovered to have been stealing from the employer. The Tribunal has a broad discretion and in certain cases will reduce the compensation down to zero, turning a ‘successful’ unfair dismissal claim into a hollow victory.
How likely such reductions are and whether the claim is likely to be successful in the first place depends on the facts of each case. Please contact our team of specialist employment law solicitors if you require more detailed advice.