LRD guides and handbook May 2017

Law at Work 2017

Chapter 10

Other deductions and adjustments 



[ch 10: page 389]

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 wlll 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 where 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 (COT3). 



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). 



Where the Acas Code of Practice on disciplinary and grievance procedures applies to any category of dismissal (see page 357), compensation can be increased or cut by up to 25% because of either side’s failure to follow it (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).