The compensatory award — what can be claimed

The compensatory award can include:

• expenses resulting from the dismissal;

• lost wages from the dismissal date up to the hearing: wages are awarded net of the tax and national insurance that would have been paid if the claimant had been working;

• loss of statutory protection: this part of the award is supposed to reflect the loss of the job security that comes from having enough service to bring an unfair dismissal claim. It should be around £500-£600 to reflect the need for two years’ service;

• costs directly associated with seeking new work (such as travel costs to interviews): all evidence should be kept, including receipts;

• future net lost wages: the length of period awarded should reflect how long the claimant is likely to take to find alternative work, taking into account individual characteristics, such as age and any disability, and general features such as poor economic conditions. If a claimant has not found alternative work quickly, the largest part of the compensation claim is likely to be for actual and projected net lost earnings;

• loss of pension rights: particularly if the employee was in a final salary scheme, this sum can be very significant. In an important new case, Griffin v Plymouth Hospital NHS Trust [2014] EWCA Civ 1240, the Court of Appeal confirmed that where there is good evidence that an employee would have stayed in her job for the whole of her working life, compensation should aim to reflect the amount of pension the employee would have received on retirement, not the value of the pension contributions.

A tribunal can award compensation for loss of the opportunity to work a job share (Stroud Rugby Football Club v Monkman [2013] UKEAT/0143/13/SM/2110).

If an employee is on long-term sick leave at the time of the dismissal and the sickness was not caused by the dismissal, future lost earnings are normally limited to any sick pay they would have earned had they not been unfairly dismissed (Burlo v Langley [2007] IRLR 145). The position is more complicated where a claimant is unfit for work as a result of the unfair dismissal (for example, depression as a result of a dismissal decision).

Employees who believe their employer may have caused them personal, including psychiatric, injury should take early legal and medical advice as the issues are very complex.

No compensation can be awarded for periods during which a claimant has no right to work in the UK (Kings Castle Church v Okukusie [2012] UKEAT 0472/11/1306).

Employers are not allowed to avoid paying proper compensation by arguing that they do not have enough money and that the size of the award would endanger their business. The employer’s ability to pay is irrelevant to the size of the award (Tao Herbs and Acupuncture Limited v Jin [2010] UKEAT 1477/09/1407).