LRD guides and handbook May 2019

Law at Work 2019 - the trade union guide to employment law

Chapter 10

Other deductions and adjustments 





[ch 10: page 375]

Any money already paid to the employee by the employer as a result of the dismissal, for example, a settlement payment, will be deducted from compensation. 





Any Income Support, Jobseeker’s Allowance (JSA), income-based Employment and Support Allowance (ESA) or Universal Credit will be deducted through a process known as recoupment and paid by the employer direct to the Department for Work and Pensions. The recoupment procedure is only triggered if an award is made by the tribunal. There is currently no legal requirement to repay state benefits if a claim is settled using a compromise/settlement agreement or through Acas conciliation (see Chapter 14). 





If a tribunal concludes that the dismissal was unfair but that the employee could have been fairly dismissed if the employer had followed a fair procedure, the award can be reduced to reflect the percentage likelihood of a fair dismissal. This is known as a Polkey reduction (after the case of Polkey v Dayton Services Limited [1987] IRLR 503). 





Compensation can be increased or cut by up to 25% for failure to follow the Acas Code of Practice on Disciplinary and Grievance procedures where it applies (section 207A, ERA 96). 





The basic award is equivalent in amount to a statutory redundancy payment. Any statutory redundancy payment already received is offset against the basic award (Digital Equipment v Clements [1998] IRLR 134), but only if the tribunal decides that there was a genuine redundancy (Boorman v Allmakes [1995] IRLR 553).