Other deductions and adjustments

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) or income-based Employment and Support Allowance (ESA) received by the employee is deducted from the award 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 where an award is made by the tribunal. There is no legal requirement to repay state benefits if a claim is settled using a compromise agreement or Acas conciliation.

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 will 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% because of the employer’s or employee’s failure to follow the Acas Code of Practice on disciplinary and grievance procedures (see pages 281 and 286) (section 207A, ERA 96).

The basic award is equivalent in amount to a statutory redundancy payment. Any statutory redundancy payments already received are 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).