Understanding what compensation you could be owed
If you’re taking your case to a UK employment tribunal, understanding what compensation you might be entitled to is essential. Tribunals award compensation to address the impact of unlawful actions by your employer. This guide will walk you through the types of compensation you can claim, how they are calculated, and what factors the tribunal considers.
1. Basic Award
The basic award is a statutory compensation given for unfair dismissal.
-
What It Covers:
-
The statutory redundancy payment. It’s based on your age, length of service, and weekly gross pay (capped at a statutory limit).
-
-
How It’s Calculated:
-
Half a week’s pay for each full year you were age 22 or under; one week’s pay for each full year you were 22 or older, but under 41; one and a half week’s pay for each full year you were 41 or older.
-
There is a maximum amount you can claim. If you were dismissed on or after 6th April 2024 and your gross weekly pay was more than £700, you can only claim up to £700 a week.
-
You can use the government’s online calculator to check your basic award.
-
2. Loss of Statutory Rights
This compensation reflects the disadvantage of you losing certain workplace rights.
-
What It Covers:
-
Loss of rights such as unfair dismissal protection until you’ve worked 2 years in a new job.
-
-
How It’s Calculated:
-
Tribunals usually award a small sum, often £300 to £500.
-
If you have a history of staying in jobs for more than 2 years you are more likely to receive the maximum £500.
-
3. Loss of Income
If you were unfairly dismissed or subjected to discrimination, you could claim for any wages you lost because of your employer’s actions.
-
What It Covers:
-
To compensate how much you would have earned if the unlawful action hadn’t occurred, including: basic salary; bonuses and commission; overtime pay; pension contributions.
-
-
How It’s Calculated:
-
If you found new employment since the unfair or constructive dismissal, you will only be able to claim for the weeks you were out of work.
-
You will need to prove that you did or are doing everything in your power to limit your losses, such as regularly applying for new jobs.
-
If your new job has a lower wage you can claim for the difference in pay. Future losses can be claimed if it is deemed as reasonable.
-
In unfair dismissal claims, there is a limit of 52 weeks pay for loss of income.
-
4. Job Seeking Expenses
If you incurred expenses while looking for a new job, you could claim these costs.
-
What It Covers:
-
To reimburse travel expenses to interviews and the job centre; cost of training and certifications to enhance employability.
-
-
How It’s Calculated:
-
You can present receipts and invoices for reimbursement.
- Mileage can be charged at the government’s approved mileage rates, currently £0.45 per mile.
-
5. Other Financial Losses
If you’ve experienced other financial losses due to your employer’s actions, you might be able to claim for these as well.
-
What It Covers:
-
Primarily used to compensate for loss of employment benefits such as life/health insurance plans, company cars and online doctor services.
- Can cover statutory benefits such as maternity pay.
- Other financial losses can also be requested including but not limited to lost investment/pension growth; mortgage interest payments (where a worse rate was offered at re-mortgage due to a reduced salary); costs associated with moving house for new employment.
-
-
How It’s Calculated:
-
It’s important that losses have a clear monetary value which can be evidenced, and must be attributed to the employer’s actions.
- When claiming for loss of insurance policies, you should get quotes for the same level of coverage to show how much it would cost you to pay it yourself.
-
6. Injury to Feelings
To acknowledge the emotional distress caused by your employer’s unlawful actions.
-
What It Covers:
-
To provide financial restitution for any humiliation, anxiety, upset, or loss of self-confidence.
- It does not cover issues resolved informally or with minimal distress.
-
-
How It’s Calculated:
-
Tribunals use Vento Bands to determine a suitable amount to award for injury to feelings, and rely heavily on previous tribunal rulings to determine what figures are fair and reasonable.
- The lower band of £1,200 – £11,700 is for less serious cases and isolated incidents; the middle band of £11,700 – £35,200 is for cases of moderate harm; the upper band of £35,200 – £58,700 is for the most serious cases such as ongoing harassment and severe psychological harm.
- Whilst it is rare, in exceptional cases injury to feelings awards can exceed £58,700 and theoretically are unlimited.
-
7. Personal Injury
If your employer’s unlawful actions caused you physical or mental harm, you might be entitled to compensation for personal injury.
-
What It Covers:
-
Physical pain, such as back pain from unsafe working conditions.
- Mental health conditions, such as depression from workplace bullying.
-
-
How It’s Calculated:
-
The amount that can be claimed for personal injury is set out by the Judicial College. Evidence will be required to successfully make a personal injury claim, including doctor notes and prescriptions.
- Generally, minor physical injury which has a recovery time of less than 3 months can attract up to £2,990. For major physical injury, such has the loss of both legs, compensation can range from £293,850 – £344,150.
- For psychiatric injury there are 4 clear bands. The less severe band of £1,310 to £5,000 is for less severe psychiatric injuries; the moderate band of £5,000 to £16,270 is for cases of moderate injury; the moderately severe band of £16,270 to £46,780 is for moderately severe cases of harm; and the severe psychiatric band of £46,780 to £98,750 is for the most extreme cases.
- Prescriptions, doctor visits and therapy/recovery sessions can all be claimed for as medical expenses if directly associated with the employer’s actions.
-
8. ACAS Uplift
If your employer failed to follow the ACAS Code of Practice, the tribunal could increase your compensation by up to 25%.
-
What It Covers:
-
Additional compensation for procedural failings.
-
-
How It’s Calculated:
-
Your total compensation could be increased by up to 25% if your employer breached the ACAS Code of Practice.
- For example, if your total compensation is £20,000 and it was found that your employer did not properly investigate the alleged misconduct or offer you a chance to respond to the allegations, you could be awarded an additional £5,000.
- The ACAS uplift also works in reverse. Compensation can be reduced by up to 25% if the employee refused to cooperate and deliberately did not follow the ACAS Code of Practice.
-
9. Aggravated Damages
If your employer acted maliciously or in a high-handed manner, you might receive an award for aggravated damages.
-
What It Covers:
-
Additional compensation for an employer’s deliberately bad behaviour.
- Intended to compensate a Claimant “for injury to his proper feelings of dignity and pride and for aggravation generally” [Daley v Ramdath (1993) H.L.R 273].
-
-
How It’s Calculated:
-
The bad behaviour by the employer needs to be deliberate and especially nasty. For example, purposefully humiliating you or calling you offensive remarks during the dismissal or throughout the tribunal proceedings.
- Judges will generally look at previous case law to determine a suitable award for aggravated damages, but are generally no more than a couple thousand pounds.
-
10. Time Preparation Costs
If you spent significant time preparing your case, you might recover costs.
-
What It Covers:
-
Compensation for time you spent working on the case.
- Generally speaking, each party in an employment tribunal pays their own costs. Therefore successful Time Preparation Orders are usually only granted where the employer purposefully made the process take longer than it reasonably should have.
-
-
How It’s Calculated:
-
The current hourly rate a litigant-in-person can charge for their time is £41 per hour.
-
11. Interest
To account for the long period of time it takes for your case to reach a final hearing, interest may be added to your compensation.
-
What It Covers:
-
The time from the financial loss to the date of the final or remedy hearing.
- Any delays in making the compensation payment after a remedy order.
-
-
How It’s Calculated:
-
UK Employment Tribunals typically apply an interest rate of 8%.
-
12. Gross Up
To account for any taxes which may be due on the compensation, ensuring the employee is not at a financial disadvantage.
-
What It Covers:
-
The Claimant should receive the total amount the Tribunal has awarded. The employer will either pay any associated taxes or provide additional funds for the Claimant to cover this expense. This is called “grossing up”.
-
-
How It’s Calculated:
-
It’s important to consider what tax rate any compensation could be taxed at (it might put you into a new bracket) and add this percentage to the final figure.
- Generally speaking, the first £30,000 you receive as financial compensation is tax-free, although it depends on how this is received/recorded.
-
Summary
Top tips for claiming compensation
-
Keep Evidence:
- Everything you claim for requires evidence. Ensure to save payslips, contracts, correspondence, receipts, prescription packets, doctor notes and medical reports. Print google maps showing the distance between your home and job interviews, quotes from insurers, and anything else which shows a financial loss.
- It’s important you track your job hunting activity: save application emails and rejections, print-screen job adverts, make accounts with recruitment agencies. Make sure all this evidence is easily accessible for a final hearing (or remedy hearing, if specified by the tribunal).
-
Be Realistic:
-
Tribunal compensation is meant to remedy specific losses, rather than punish your employer. The Tribunal’s aim is to restore your financial and emotional state, not enrich you.
-
-
Understand Limitations:
-
Speculative losses or overly vague claims are unlikely to succeed. Providing as much detail as possible, along with evidence, within your Schedule of Loss document is vital to getting everything you are entitled to.
-
Ensure your claim for compensation links directly to your employer’s unlawful actions.
-
