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.

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

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