When an employee feels they have been unfairly dismissed from their job, they have the option to take their case to an employment tribunal. These tribunals are designed to resolve disputes between employers and employees, especially when it comes to issues like unfair dismissal. If an employment tribunal finds that an employee has been unfairly dismissed, they may be entitled to compensation in the form of an award.
Unfair dismissal occurs when an employee is terminated from their job without a valid reason or in breach of employment law. This can include being let go for discriminatory reasons, for whistleblowing, for taking part in trade union activities, or for exercising their legal rights, such as maternity or paternity leave. If an employer is found to have unfairly dismissed an employee, they may need to pay compensation to the employee as an award.
There are two main types of employment tribunal awards for unfair dismissal: basic awards and compensatory awards. Basic awards are based on a formula that takes into account the employee’s age, length of service, and weekly pay. The maximum basic award is currently £16,320 (as of 2021), but this amount is subject to change annually. The compensatory award, on the other hand, can be much higher and is intended to compensate the employee for financial losses resulting from their unfair dismissal, such as lost wages, benefits, and potential future earnings.
When calculating the compensatory award, the employment tribunal will take into account various factors, such as the employee’s efforts to find new employment, any interim earnings, and whether the dismissal has caused any long-term effects on the employee’s career prospects. There is also a cap on the compensatory award, which is currently set at £89,493 (as of 2021). However, this cap may be waived or increased in exceptional cases where the tribunal deems it necessary.
In addition to basic and compensatory awards, an employment tribunal may also order the employer to pay a sum known as an additional award if they find that the employer has failed to follow proper dismissal procedures, such as providing the employee with a written statement of reasons for dismissal or offering them the right to appeal. The maximum additional award is currently set at 25% of the compensatory award, with a minimum of £900 and a maximum of £4,219 (as of 2021).
It is important to note that not all successful unfair dismissal claims will result in compensation awards. The employment tribunal has the discretion to decide whether compensation is appropriate based on the circumstances of each case. If an employee is found to have contributed to their dismissal in some way, their award may be reduced or even eliminated altogether.
Employers should take steps to prevent unfair dismissals by ensuring they have proper dismissal procedures in place, treating employees fairly and consistently, and providing clear reasons for any terminations. It is also important for employers to seek legal advice before taking any disciplinary action against an employee to minimize the risk of facing an unfair dismissal claim.
In conclusion, employment tribunal awards for unfair dismissal are designed to compensate employees who have been wrongfully terminated from their jobs. These awards can vary in amount depending on factors such as the employee’s age, length of service, and financial losses resulting from the dismissal. Employers should be aware of their responsibilities under employment law to prevent unfair dismissals and the potential financial implications of failing to adhere to proper dismissal procedures.