Employment: How to Work Out How Much Compensation You Can Claim

One of the most important questions that you will ask yourself before bringing an employment claim is ‘will this be worth it?’

Worth is entirely subjective and can mean different things to different people, some people bring claims because they want to punish an employer who has treated them badly, others will bring a claim because they have not received their due from their employer, and some people will bring a claim to prevent bad treatment happening to others. Everyone is different and accomplishing these goals can make a claim ‘worth it’ too many people. Employment claims are usually driven by emotion and it is rare for anyone to bring a claim for the sole reason of receiving compensation.

Rarely, will anyone say I want a claim to be financially ‘worth it?'

In my time as a legal professional, I have found that clients and potential clients alike never want to openly admit that they are interested in the amount of compensation they may or may not receive. However, the compensation should be considered when thinking about bringing a claim. Bringing a claim is a stressful process and you really must consider everything you’re hoping to get out of it before charging ahead, that includes the money.

This article will focus on Unfair and Constructive Dismissal claims and will lay out how compensation is calculated so that you can estimate the financial value of your claim and help decide if bringing a claim is right for you.

BASIC AWARD

A basic award – this will differ depending on what type of claim you bring e.g. unfair dismissal, constructive dismissal, discrimination, etc.

The Basic Award is reached by taking the employee’s age and years of service to get a multiplier and then multiplying the weekly wage to arrive at a figure.

However, the weekly pay figure is limited to a maximum of £475 per week and the maximum years that will be considered is 20.

After two years of service, the weekly pay is multiplied by 0.5

For each year of service over the age of 22, the weekly pay is multiplied by 1

For each year of service over the age of 41, the weekly pay is multiplied by 1.5

So for a 29-year-old who has been employed for seven years on a weekly wage of £250.00 the calculation would look like:

7 years at £250.00 x 1 = £1,750.00

OTHER AWARD

You can also claim for the following as part of your compensation:

  • Loss of Wages from the date of dismissal until the Tribunal hearing, net of tax and national insurance contributions.
  • Future Loss of Wages, usually limited to three months after your last working day. But is the length you can claim future loss of earnings is at the tribunal’s discretion.
  • Loss of Perks, such as health care.
  • Loss of Employment Protection. In your new job, you will have to work from two years before you regain any employment rights. You can claim for this loss of protection.
  • Loss of Pension

DEDUCTIONS

The tribunal can choose to reduce your award if the following applies to your situation:

  • If you have refused an offer to be reinstated and it is unreasonable to reject that offer.
  • If you are partly to blame for their own dismissal.
  • Your conduct before you were dismissed.
  • If you have already received redundancy payments if your dismissal was due to redundancy.
  • You share some blame for your termination, there can be a reduction in compensation
  • You have not made an effort to find a new job or if you have refused suitable job offers.
  • Where your dismissal was actually fair, but the way it was carried out was unfair.
  • You have not complied with the ACAS code.

The tribunal can also reduce your compensation if you have received the following:

  • Redundancy payments.
  • Payments due to the dismissal.

In conclusion, your compensation will be made up of a basic award and the other award. It is possible for the tribunal to make deductions to your award in particular circumstances.