When an employee is wrongfully terminated from their job, they may be entitled to receive compensation in the form of an unfair dismissal compensatory award. This award is designed to help the employee recover financially from the unfair dismissal and to provide some level of justice for the wrongdoing that has occurred. In this article, we will explore what exactly the unfair dismissal compensatory award is, how it is calculated, and what factors are taken into consideration when determining the amount of the award.
The unfair dismissal compensatory award is a financial award that is given to an employee who has been unfairly dismissed from their job. Under the Employment Rights Act 1996, employees in the UK are entitled to bring a claim for unfair dismissal if they believe they have been wrongfully terminated from their job. If the employee is successful in their claim, they may be awarded compensation in the form of the unfair dismissal compensatory award.
The purpose of the unfair dismissal compensatory award is to compensate the employee for the financial losses they have suffered as a result of their unfair dismissal. This can include loss of earnings, loss of benefits, and other financial losses that the employee has incurred as a direct result of their termination. The award is also meant to reflect the level of wrongdoing on the part of the employer and to provide some level of justice for the unjust treatment that the employee has endured.
Calculating the unfair dismissal compensatory award can be a complex process, as there are a number of factors that need to be taken into consideration. The primary factor that is looked at when determining the amount of the award is the financial losses that the employee has suffered as a result of their unfair dismissal. This can include lost wages, bonuses, benefits, and any other financial losses that the employee has incurred since their dismissal.
In addition to financial losses, other factors that are taken into consideration when calculating the unfair dismissal compensatory award include the length of the employee’s service with the company, the reason for their dismissal, their age, and their ability to find new employment. The employee’s efforts to mitigate their losses by finding new employment will also be taken into account when determining the amount of the award.
In some cases, the unfair dismissal compensatory award may also include a sum for injury to feelings. This is intended to compensate the employee for the emotional distress and suffering that they have endured as a result of their unfair dismissal. The amount awarded for injury to feelings will vary depending on the severity of the emotional distress suffered by the employee.
It is important to note that there is a statutory cap on the amount of the unfair dismissal compensatory award that can be given. As of April 2021, the maximum compensatory award for unfair dismissal is £88,519 or 52 weeks’ gross pay – whichever is lower. This cap is meant to limit the amount of compensation that can be awarded for unfair dismissal and to prevent excessive payouts in certain cases.
In conclusion, the unfair dismissal compensatory award is an important form of compensation for employees who have been wrongfully terminated from their jobs. This award is designed to help employees recover financially from their unfair dismissal and to provide some level of justice for the wrongdoing that has occurred. By understanding how the award is calculated and what factors are taken into consideration, employees can better navigate the process of seeking compensation for their unfair dismissal.