Other deductions and adjustments

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

Any income support, job-seekers 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 of 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.

Compensation can also be reduced to reflect the percentage likelihood that even if a fair procedure had been followed, the employee would still have been dismissed. This is known as a Polkey reduction.

Compensation can also 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 274 and 280) (section 207A, ERA 96).

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