The compensatory award
[ch 10: page 405]The compensatory award (section 123, ERA 96), paid on top of the basic award, is intended to cover financial losses resulting from the dismissal. The ET can award the amount it considers “just and equitable”, but the award cannot exceed the financial loss caused by the dismissal (Dunnachie v Kingston upon Hull City Council [2005] ICR 1052).
There is no compensation for injury to feelings or personal (psychiatric) injury in unfair dismissal cases, no matter how bad the employer’s behaviour (Dunnachie v Kingston upon Hull City Council [2004] IRLR 727). The position is different in a claim for discriminatory dismissal (see Chapter 7: Compensation).
Only losses that result from the dismissal can be recovered. For example, an NHS consultant was not entitled to recover earnings from private work, because they were not earnings he was entitled to under his contract with the NHS Trust. It made no difference that the extra earnings depended on the lost job (Schlesinger v Swindon & Marlborough NHS Trust EAT/0072/04).