Unfair dismissal is a situation where an employee is dismissed from their job without a fair reason or due process. This can be a difficult and stressful experience for the employee, especially if they believe that the dismissal was unjust. In cases of unfair dismissal, employees may be entitled to compensation in the form of a compensatory award.
A compensatory award is a financial settlement that is awarded to an employee who has been unfairly dismissed from their job. This award is designed to compensate the employee for any losses that they have suffered as a result of their dismissal. The amount of the compensatory award will vary depending on the circumstances of the case and can include payment for lost wages, benefits, and potential future earnings.
In the UK, employees who believe that they have been unfairly dismissed have the right to make a claim to an Employment Tribunal. If the Tribunal determines that the dismissal was unfair, they will typically make an award of compensation to the employee. The compensatory award is intended to put the employee back in the position they would have been in if they had not been unfairly dismissed.
There are a number of factors that will be taken into account when determining the amount of the compensatory award. These can include the length of time that the employee has been employed by the company, their age, their salary, and their chances of finding new employment. Other factors, such as the reason for the dismissal and the conduct of both the employer and the employee during the dismissal process, may also be considered.
It is important to note that there is a cap on the amount of compensation that can be awarded for unfair dismissal. In the UK, the maximum compensatory award that can be made by an Employment Tribunal is currently £89,493 (as of April 2021). This cap is reviewed annually and may be adjusted for inflation.
In addition to the compensatory award, an Employment Tribunal may also award a basic award to an employee who has been unlawfully dismissed. The basic award is calculated in a similar way to statutory redundancy pay and is based on the employee’s age, length of service, and weekly earnings. The maximum basic award that can be made is currently £16,320.
It is worth noting that employees who have been unfairly dismissed may also be entitled to other remedies, such as reinstatement or re-engagement. Reinstatement involves the employee being rehired by their former employer and being placed back in their original position. Re-engagement involves the employee being rehired by their former employer but placed in a different position.
In conclusion, a compensatory award for unfair dismissal is a financial settlement that is awarded to an employee who has been unfairly dismissed from their job. This award is intended to compensate the employee for any losses that they have suffered as a result of their dismissal. The amount of the compensatory award will vary depending on the circumstances of the case, but there is a cap on the amount that can be awarded. Employees who believe that they have been unfairly dismissed should seek legal advice to determine their rights and options for seeking compensation.