employment tribunal awards for unfair dismissal can have a significant impact on both employers and employees. Unfair dismissal occurs when an employee is fired without a valid reason or without following the proper procedures. When a case of unfair dismissal is brought before an employment tribunal, the tribunal will decide on the appropriate remedy, which often includes a financial award to compensate the employee for their loss of earnings and any other losses suffered as a result of the unfair dismissal.
There are several factors that can influence the amount of the award in cases of unfair dismissal. The Employment Rights Act 1996 sets out the maximum amount of compensation that can be awarded in unfair dismissal cases, which is currently £88,519 or 52 weeks’ gross pay, whichever is lower. However, this maximum amount is rarely awarded and most awards are significantly lower.
One of the key factors that can affect the amount of the award is the length of time the employee has been employed by the company. Employees are entitled to a minimum notice period when they are dismissed, based on the length of their continuous service with the company. The longer an employee has been with the company, the longer the notice period they are entitled to, and this can increase the amount of compensation awarded by the tribunal.
Another factor that can influence the amount of the award is the conduct of the employer. If the tribunal finds that the employer acted in a particularly harsh or unfair manner when dismissing the employee, they may award a higher amount of compensation as a way of penalizing the employer for their actions. This is known as a “Polkey deduction”, named after the case of Polkey v AE Dayton Services Ltd [1987] IRLR 503, which established the principle that compensation can be reduced if the tribunal finds that the employee would have been dismissed anyway, but not in the unfair manner that the employer chose.
In addition to compensation for loss of earnings, tribunals can also award compensation for other losses suffered by the employee as a result of the unfair dismissal. This can include compensation for loss of benefits such as pension contributions, bonuses, or company car allowances, as well as compensation for loss of reputation or other intangible losses.
It is important to note that employment tribunal awards for unfair dismissal are subject to a cap on the compensatory award, which is currently £88,519 or 52 weeks’ gross pay, whichever is lower. In cases where the employee is successful in proving unfair dismissal but the compensatory award would exceed this cap, the tribunal can award a basic award instead, which is based on the employee’s age, length of service, and weekly pay, up to a maximum of £16,344.
In addition to financial compensation, tribunals can also order reinstatement or re-engagement of the employee if they believe this is appropriate. Reinstatement means that the employee is returned to their previous position as if they had never been dismissed, while re-engagement involves re-employment in a different role or department within the company. However, reinstatement and re-engagement are rare remedies and are usually only ordered if both parties agree to it.
employment tribunal awards for unfair dismissal can have serious consequences for employers, not only in terms of financial compensation but also in terms of damage to their reputation and the morale of their remaining employees. Employers should ensure that they have clear and fair dismissal procedures in place and that they follow these procedures rigorously to reduce the risk of unfair dismissal claims.
Employees who believe they have been unfairly dismissed should seek legal advice as soon as possible to determine whether they have a valid claim and what remedies may be available to them. employment tribunal awards for unfair dismissal are designed to compensate employees for their losses and to ensure that employers are held accountable for their actions.