When an employee is unfairly dismissed from their job, it not only affects their financial stability but also their emotional well-being. To mitigate the impact of unfair dismissal, the employment tribunal may award a compensatory sum to the employee. This compensatory award, also known as the unfair dismissal compensatory award, aims to compensate the employee for the financial loss incurred due to the unfair dismissal. In this article, we will delve into the details of the unfair dismissal compensatory award, including how it is calculated and what factors influence the amount awarded.
The unfair dismissal compensatory award is intended to put the employee back in the financial position they would have been in if they had not been unfairly dismissed. It takes into account various factors such as the employee’s length of service, their age, their salary, their chances of finding alternative employment, and the financial losses they have incurred as a result of the dismissal.
One of the key factors that influence the amount of the compensatory award is the length of the employee’s service with the employer. The longer the employee has been employed by the company, the higher the compensatory award is likely to be. This is because employees with longer service are likely to have stronger ties to the company and may find it more difficult to secure alternative employment.
Another important factor that is taken into consideration when calculating the compensatory award is the employee’s age. Older employees may find it more challenging to secure alternative employment after being unfairly dismissed, especially if they have specialized skills or experience that are not easily transferable to other roles. As a result, older employees may be awarded a higher compensatory sum to account for the difficulties they may face in finding new employment.
The employee’s salary at the time of their dismissal is also a significant factor in determining the amount of the compensatory award. Employees with higher salaries are likely to receive a larger compensatory sum to account for the loss of income they have suffered as a result of the unfair dismissal. This is because their earning potential is greater, and it may take them longer to secure a new role that matches their previous salary.
In addition to these factors, the employment tribunal will also consider the employee’s chances of finding alternative employment when calculating the compensatory award. If the employee is able to secure a new job relatively quickly after being dismissed, the compensatory award may be lower. However, if the employee is struggling to find new employment, the compensatory sum is likely to be higher to account for the longer period of financial hardship they may experience.
It is important to note that the compensatory award is intended to compensate the employee for the financial losses they have incurred as a result of the unfair dismissal. This may include loss of earnings, loss of benefits such as pension contributions or healthcare benefits, and any other financial losses directly related to the dismissal. The compensatory award does not include any punitive damages or compensation for emotional distress, as these are typically addressed separately in discrimination or harassment cases.
In conclusion, the unfair dismissal compensatory award is a vital form of protection for employees who have been unfairly dismissed from their jobs. It aims to compensate employees for the financial losses they have incurred as a result of the unfair dismissal and help them get back on their feet. By considering factors such as the employee’s length of service, age, salary, and chances of finding alternative employment, the employment tribunal is able to calculate a fair and just compensatory award.