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