COMPENSATION AND DAMAGES
Understand the potential compensation if your claim is successful
Learn what factors could reduce the compensation you may be awarded
Find out whether your claim is economical, comparing the possible costs and outcomes
Understand whether a settlement offer is inline with what you could be awarded at tribunal
A successful claim can help you feel a sense of justice and closure following what may have been an upsetting experience. For some people an employment claim is also a chance to make sure your employer will treat you, or other people, better in future. However, you do need to know whether the potential compensation will justify the time and cost of a case.
Having an idea of the compensation you could receive can be beneficial if your employer offers you a settlement agreement. You can compare what you might receive in compensation in the event of a successful claim, with what your employer is offering. We can support you through negotiating an agreement, but it will be helpful if you have reasonable expectations and a general idea of what a tribunal might offer for comparison.
HOW DOES A TRIBUNAL DECIDE HOW MUCH COMPENSATION TO AWARD?
Compensation will vary depending on your claim and the details of your case. There are a few different kinds of compensation that a tribunal can award:
Basic Award
A Basic Award is made in cases of unfair dismissal, in addition to a Compensatory Award.
The Basic Award is a fixed sum based upon your weekly pay, your age, and the amount of time you have worked for your employer.
Half of your weekly pay for each year of service when you were under the age of 22
One week of pay for each year you were aged between 22 and 41
One and a half week’s pay for each year of service over the age of 41
You will usually not receive a Basic Award if you have worked for your employer for less than two years.
The maximum amount of years’ service that can be accounted for is 20. If you were dismissed before 6th April 2023 you may only claim a weekly amount up to £571. For dismissals after 6th April 2023 the maximum weekly amount increases to £643.
Breach of contract
If you sustained financial loss because of a breach of contract, you may be able to claim compensation. This could include a failure to pay your travel expenses, holiday pay, sick pay, or pay during your notice period. You may also have suffered financially from a change made to your contract without your agreement such as changing your pay, moving your location resulting in greater travel costs, or taking away your company car.
You can only claim for breach of contract through an Employment Tribunal if you are no longer working for your employer.
Compensatory Award
The Compensatory Award is based on loss of earnings due to unfair dismissal, because of your employers conduct. This part of the award will compensate for the time you are unemployed, or for the time the Tribunal thinks it will take you to find a new job.
If you have a new job but the pay and benefits are less than at your previous job, you may claim for losses incurred in the time it will take you to find another job with the similar pay and conditions.
If you haven’t found another job by the time the case is heard, the Tribunal will use its knowledge and experience to decide how long it may take you to find another job, looking at factors including your age, your pay, your training and the opportunities available in your field. You should keep evidence of your job search, as you will need to show that you have been making a reasonable effort to find a job.
The Compensatory Award is limited to one year's gross pay or £115,115 - whichever is the lower.
Detriment
Compensation for detriment will be ordered where your employer has put you at a disadvantage because you tried to assert an employment right protected by law, without going so far as to dismiss you. This only applies to certain employment rights.
Examples of a detriment include being denied training or promotion, required to do onerous work, subjected to demeaning or offensive treatment (which may or may not also be discrimination), or a refusal to allow you to be accompanied at disciplinary or grievance hearings.
You may also be able to make a detriment claim where you have lost your job but are unable to claim unfair dismissal, because you are classed as a worker rather than an employee. Detriment damages may also include injury to feelings caused by the detriment.
Discrimination Claims
If your dismissal was discriminatory, the Compensatory Award is not capped and is, potentially, unlimited. The tribunal may make the following awards in addition to the Basic and Compensatory Awards, or where you have been discriminated against but not dismissed.
Financial loss covers money you’ve lost because of the discrimination. This could include loss of earnings, pension contributions, maternity benefits if you were pregnant, and benefits such as health insurance or a company car. Other examples include salary if you weren't given a promotion because of discrimination, or wages lost because you had to take time off following the discrimination.
In dismissal cases you will be expected to ‘mitigate your loss’, to try your best to limit how much you lose. For example, the tribunal will expect you to look for another job, claim benefits you are entitled to, and only pay reasonable and necessary expenses when looking for new employment.
Personal injury damages may be awarded where you have suffered a physical injury or a mental health problem which goes beyond injury to feelings, because of the discrimination. The amount will depend upon the injury, but in most cases the impact on your health will be reflected in damages for injury to feelings.
Aggravated damages are awarded where the treatment was exceptionally bad. These damages are rare but may apply where your employer has deliberately discriminated against you knowing that they were acting illegally, or where their response to the claim has been especially unpleasant or aggressive.
Injury to feelings compensates you for emotional distress caused by the discrimination. You will need to prove that you suffered distress, for example by providing a doctor’s report if you’ve received medical support.
The amount awarded for injury to feelings is split into bands depending on the seriousness of the discrimination. For claims issued after 6th April 2024 these bands are:
£1,200-£11,700 for less serious cases or one-off acts of discrimination
£11,700 - £35,200 for more serious cases, but where the top band is not justified
£35,200 - £58,7200 for the most serious cases, such as a sustained case of discrimination
Exceptional cases may exceed the upper band.
The Tribunal will consider whether the discrimination was deliberate, how your employer responded to the discrimination, and the effect it has had on you.
Interest can be claimed on your payment based on the time between the discrimination and you receiving compensation. If your employer doesn’t pay the damages within 14 days, you will also be entitled to additional interest.
ADDITIONAL FACTORS
Your Compensatory Award may be increased by up to 25% if your employer did not follow the ACAS code of practice on disciplinary and grievance procedures. This includes acting promptly and consistently, giving you an opportunity to respond and appeal, and allowing you to be accompanied by a relevant representative. The increase will reflect the extent to which your employer failed to comply with the code.
If your employer did not give you a written statement of your terms and conditions within 2 months of starting your job, you may be awarded an additional two to four weeks gross pay. This award is only available alongside another employment claim; it is not a standalone remedy.
If you have been unfairly dismissed you may also receive a small additional sum, between £250 and £500, for loss of statutory rights. This reflects that you will need to work at your new role for 2 years before you regain some employment rights, including the right to claim for unfair dismissal.
CAN THESE AMOUNTS BE REDUCED?
The Tribunal has the power to reduce your award in certain circumstances. Your award may be reduced if:
Your conduct has contributed to your dismissal
Your employer has offered you your job back but you have refused it without a good reason
You have received statutory redundancy pay, but go on to succeed in an unfair dismissal claim (the Basic Award and statutory redundancy are essentially the same award, and you cannot receive both).
You would have been dismissed even if your employer had acted legally
The Tribunal does not feel you have done enough to find a new job
You failed to attend disciplinary meetings without a good reason
You have obstructed the investigation into your dismissal
If you have received benefits since your dismissal, your employer may have to pay some of your compensation to the Department for Work and Pensions to account for these benefits.
COSTS
It is unusual in Employment cases for a party to be ordered to pay the other side's costs. Each side will pay their own legal costs in almost every case. The Tribunal may order one party to pay the other sides costs if they have been abusive, disruptive or have otherwise acted unreasonably during the case. A Tribunal may also order a party to pay costs if their claim had no reasonable chance of success, or they defended a claim where there was clearly no defence.
SETTLING A CLAIM
You may be able to settle your claim before reaching a Tribunal. The amount you would receive from your employer will usually take into account the principles on which cases are conducted and the risks involved of winning and losing. The settlement may also take account of the time and money both parties save by settling the claim.
If it looks like you may be able to settle your case, we can help you to negotiate a suitable amount.
GET IN TOUCH
Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry.
Address: Spencer Shaw Solicitors Limited
St Mary's House, 68 Harborne Park Road,
Harborne, Birmingham, B17 0DH
Opening hours:
Monday - Friday 9:00AM - 5:00PM
Saturday, Sunday & Bank Holidays - Closed
Keep in touch
