When an employee is let go from their job in a way that is deemed unfair, they may be entitled to compensation in the form of a compensatory award. This award is designed to help alleviate the financial burden caused by the unfair dismissal and to provide some form of justice for the employee. In this article, we will take a closer look at the unfair dismissal compensatory award, how it is calculated, and what factors are taken into consideration.
The compensatory award for unfair dismissal is intended to compensate the employee for the financial losses they have suffered as a result of being wrongfully dismissed from their job. This can include lost wages, benefits, and bonuses as well as any future income that the employee may have earned if they had not been unfairly dismissed. The award is also designed to take into account the emotional distress and reputational damage that may have been caused by the unfair dismissal.
The amount of the compensatory award can vary greatly depending on a number of factors. One of the primary considerations is the length of time it is expected to take for the employee to find a new job. This can be influenced by factors such as the current job market, the employee’s skills and experience, and the availability of relevant job opportunities. In general, the longer it is expected to take for the employee to find a new job, the higher the compensatory award is likely to be.
Another factor that is taken into consideration when calculating the compensatory award is the employee’s length of service with the company. Employees who have been with the company for a longer period of time are generally entitled to a larger compensatory award, as they are more likely to have built up significant benefits and bonuses that they would have received if they had not been unfairly dismissed.
The employee’s salary and benefits at the time of dismissal are also important factors in determining the compensatory award. Employees who were earning a higher salary and receiving more generous benefits are typically entitled to a larger compensatory award, as they have more to lose by being unfairly dismissed. Additionally, any lost bonuses or commissions that the employee would have received if they had not been dismissed should also be taken into account when calculating the compensatory award.
In addition to financial losses, the compensatory award may also take into account non-financial damages such as emotional distress, loss of reputation, and damage to the employee’s career prospects. These intangible losses can be difficult to quantify, but they can have a significant impact on the employee’s well-being and future prospects. As such, it is important for these factors to be considered when determining the amount of the compensatory award.
It is worth noting that there is a statutory cap on the compensatory award for unfair dismissal, which is currently set at £88,519 or 52 weeks’ pay, whichever is lower. This means that even if the employee’s financial losses exceed this amount, they will not be entitled to receive more than the statutory cap in compensatory award. However, in exceptional circumstances, the cap can be exceeded if the employment tribunal deems it appropriate.
In conclusion, the unfair dismissal compensatory award is designed to compensate employees for the financial and non-financial losses they have suffered as a result of being wrongfully dismissed from their job. The amount of the award is calculated based on a number of factors, including the length of time it is expected to take for the employee to find a new job, their length of service with the company, their salary and benefits at the time of dismissal, and any non-financial damages they may have incurred. While there is a statutory cap on the compensatory award, in some cases this cap may be exceeded in order to provide justice for the employee.