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Compensation for Unfair Dismissal

Compensation for unfair dismissal is simple in its premise – awarding money to employees that have been unfairly terminated from employment – but is much more complex in its execution.

Let’s explore how this process works. Before we begin, it’s worth noting that unfair dismissal is a statutory right, only available for staff continually employed for 23 months and 3 weeks with the same business (save for a few exceptions).

How Do Unfair Dismissal Claims Work?

First, you must register your case with the Advisory, Conciliation and Arbitration Service (ACAS).

Registering with ACAS, under the early conciliation scheme, is a stepping stone for further legal action. If ACAS are not required, or conciliation fails, they will issue you a certificate to make your claim with the Employment Tribunal. Sometimes ACAS will be able to achieve a solution through acting as the middle man.

With your certificate, employees can lodge an E31 claim with the tribunal. The employer has 28 days to respond with an ET3 form, detailing if they are challenging the claim.

What Evidence Is Required?

Once a claim elevates to a tribunal hearing, evidence and witnesses will be required. Whilst it is not a courtroom, similar procedures still apply. the employer will have to show that dismissal was for a potentially fair reason. The Tribunal will have to decide if dismissal was fair in all the circumstances.

Evidence can come in many forms. Typically, employees may need to refute the reason given for their dismissal. Witnesses can include the original case investigator, especially if the employee argues the investigation was not carried out completely, or key evidence was ignored.

Ultimately, the nature of a tribunal is to determine if the employee had sufficient reason and due cause to dismiss one of their staff, while also considering if dismissal was a fair reaction.

What Compensation Is Available?

Compensation is calculated based on two figures: a basic award and a compensatory award. The former is calculated based on your weekly pay when terminated multiplied by an age-based formula, multiplied by the number of years you were continuously working there. A cap is applied to weekly pay. Your service is capped at a maximum of 20 years .

The compensatory award, however, looks to compensate employees for any losses incurred due to the unfair dismissal, both in the form of wages, pension and other financial losses. However, this is a very speculative process and the tribunal will often need to determine many factors. For example, if the employee has not managed to find new work, the tribunal will need to determine what length of time it is likely to take the employee to find new employment. There is a maximum award in most cases of one year’s pay.

Both the basic and compensatory awards have restrictions and caps, so it is worth investigating these before making any claim, to ensure the final payout makes it worth proceeding with the tribunal process.

Legal Support

Strong legal support is always required. For employees, solicitors like Davies and Partners can advise you whether or not to press for compensation, and the extent to use ACAS to attempt early conciliation. We can also assess your situation and advise you on how a tribunal case may proceed.

For businesses, a strong legal team is essential for defence of cases. We can look at internal policies, company records and other evidence to prove that dismissal was fair and, consequently, no compensation is required.