A compensatory award is made by Employment Tribunals a successful unfair dismissal claim. Successful claimants may be awarded a compensatory award in addition to a basic award. The compensatory award is now capped at the lower of 52 weeks’ pay, or a maximum figure that varies each year (currently £78,335 for 2016-17). Compensatory awards are based on the claimant’s actual and potential loss of earnings.

The amount of the compensatory award will therefore depend on what salary and benefits they received from their old job and how long they have been out of work.

Although the claimant’s loss of earnings will be the starting point for the award, the compensatory award can be reduced if the claimant has contributed to their dismissal; if they failed to follow an internal procedure; if there has been a procedural failure by the employer, but the claimant would have been dismissed anyway; or if the claimant has failed to take adequate steps to find new employment.

Compensation will be awarded in other cases, such as discrimination, but in these cases there is no split between compensatory and basic awards.

Published in…

Updates: For employers: Unfair and constructive dismissal | For employees: Unfair dismissal |
Tagged with: Unfair dismissal |

Share this definition on

Other employment law terms

  1. ACAS Early Conciliation
  2. Adoption appointments
  3. Adoption leave
  4. Alternative dispute resolution
  5. Ante-natal care
  6. Apprenticeship
  7. Basic award
  8. Collective consultation
  9. Compromise agreement
  10. Constructive dismissal
  11. Contract of employment
  12. Disciplinary hearing
  13. Discrimination
  14. Employee shareholder
  15. Employment tribunal
  16. ETO reason
  17. Flexible working requests
  18. Grievance
  19. Gross misconduct
  20. Harassment
  21. Industrial action
  22. Injury to feelings
  23. Maternity and parental rights
  24. Maternity leave
  25. Maternity pay
  26. Mediation
  27. Parental leave
  28. Paternity leave and pay
  29. Polkey deduction
  30. Pre-termination negotiations
  31. Protected characteristics
  32. Redundancy
  33. Restrictive covenants
  34. Settlement agreement
  35. Shared parental leave
  36. Staff handbook
  37. Statutory annual leave
  38. Strikes
  39. Study and training rights
  40. Summary dismissal
  41. Sunday working
  42. Trade union
  43. TUPE
  44. Unfair dismissal
  45. Unlawful deductions
  46. Victimisation
  47. Whistle-blowing
  48. Without prejudice
  49. Working Time Regulations
  50. Written particulars
  51. Wrongful dismissal
  52. Zero hours contracts