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If you win your unfair dismissal case, the Employment Tribunal will give you compensation made up of a basic award and a compensatory award. S123 ERA 1996 permits the payment of a Compensatory Award as payment for loss of wages and workplace benefits from the time of your dismissal to the date when you assess your loses. This page tells you about the types of payment you can claim for a compensatory award and helps you structure your schedule of loss correctly.
The whole point of the Compensatory Award is summarised in the case of Norton Tool Co Ltd v Tewson . In addition to the Basic Award, you can claim wage loss, loss of pension benefits, loss of other benefits such as health cover or death in service benefit, and expenses in looking for a new job. There is an overall cap on the Compensatory Award which changes from year to year. There is no limit to the maximum Compensatory Award where the reason for the dismissal was that you made a Public Interest Disclosure (Whistleblowing), or made a Health and Safety complaint. There is also no limit to a Compensatory Award for discrimination.
For unpaid wages, holiday and notice pay claims the Employment Tribunal will order the difference between what you should have been paid and what was actually paid. Wages and holiday pay are usually calculated gross, but pay in lieu of notice is usually calculated net of tax and national insurance.
The Compensatory Award takes into account:
This covers your loss of wages from the end of your notice period (or dismissal) to the date of the Employment Tribunal hearing, minus your earnings from any new job or to the start date of your new job.
Future loss is the the estimated loss after the Employment Tribunal hearing, taking into account what you have done to find a job, whether you have actually found a job and what the new job pays. This is called mitigation of loss. The Employment Tribunal usually does not award future losses of more than 12 or 18 months.
The case of Daly v Northumberland Tyne & Wear NHS Foundation Trust UKEAT/0306/14/LA has useful guidance on how Employment Tribunals deal with future loss.
If you had fringe benefits (also known as benefits in kind) as part of your terms and conditions of employment, you should claim the value of those fringe benefits in your schedule of loss. Fringe benefits include;
The best way to value fringe benefits is to work out how much it would cost to buy that particular benefit. Benefits in kind are taxed by HMRC who would have given the benefit a notional value. Check the notional value from HMRC or from your Employer.
With regard to company cars, there is only value if your Employer allowed you to personally use the car. You can work out a rough estimate by checking how much it would cost to hire the car, and then take 50% value of the hire cost because you would have been using it for work the other 50% of the time. You could also find the tax value of the car by using HMRC’s Company Car Tax Calculator.
You can claim a small amount, usually around £300, for the loss of your employment rights (such as the right to claim unfair dismissal, or a redundancy payment) which build up with service.
Employment Tribunals do not give pensions any special status in compensation. In Aegon UK Corp Services Ltd v Roberts  EWCA Civ 932, the Court of Appeal said that the pension entitlement was simply part of the overall pay package, and should be assessed in the same way. Since the Employment Tribunal can compensate you for the loss of a valuable fringe benefit, you should make a claim for loss of your pension rights in your schedule of loss. The methods of claiming pension loss are different depending on the type of pension scheme in your workplace, and what your loss is likely to be.
There are two types of pension;
Money Purchase Schemes
A money purchase scheme is where you and your Employer contribute an agreed percentage of your salary into a pension pot. Here, your loss in a termination, is the loss of your Employer’s contributions. For example, if your gross weekly pay is £400.00 and your Employer contributes 5%, then you would lose £20.00 a week. If you have a new Employer who pays £5.00 a week into your pension then your ongoing loss is £15.00 a week.
Final Salary Schemes
Final salary schemes are quite valuable, and putting a value on your pension loss from a final salary scheme is quite complicated. It is also limited by the cap on the Compensatory Award. You must take advice from a solicitor or pensions adviser. Contact your pension provider or ask your Employer for help in calculating this. If they are not willing you may need to pay a pension adviser to help you. Before you pay anyone though, take a look at the third edition of the Employment Tribunals booklet Compensation for Loss of Pension Rights 2003. It is quite old but provides some useful guidance until such time as a new one is published.
You can include your expenses incurred whilst looking for a new job such as the cost of travel for job interviews. In Camdecca Resources v Bishop (EAT/1083/98) the Employment Appeal Tribunal confirmed that the Employment Tribunal had the power to include an award to reflect the time and effort Mr Bishop had put in to finding another job. In this case the Employment Appeal Tribunal awarded £500 expenses.
You cannot claim for injury to feelings in an unfair dismissal case, even if the dismissal has caused you stress or made you ill. If you’re making a discrimination claim, you can claim compensation for injury to your feelings as well as for your financial losses.
Citizens Advice: Calculating the Compensatory Award
WorkSmart: Compensatory Award
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