DAVID ROYDEN - EMPLOYMENT SOLICITOR
UK EMPLOYMENT LAW

David Royden is a Partner with Laytons Solicitors and Head of Employment Law, Manchester, UK

Laytons Solicitors is a national law practice specialising in all aspects of Company and Commercial Law

Laytons Solicitors, 22 St John Street, Manchester M3 4EB.
Tel: +44 (0) 161 834 2100
Fax: +44 (0) 161 834 6862

Offices at London, Manchester and Guildford, UK

 

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ORDERS AND AWARDS OF COMPENSATION

Order for Reinstatement or Re-engagement

In deciding whether to make an order that the employer should reinstate the employee in the same job or re-engage the employee under a new contract of employment, the tribunal will take into account:

  • the employee's wishes;
  • whether it is practicable for the employee to return to work for the employer (there may, for example, be circumstances in which it is not practicable because relationships at the work place have been seriously damaged);
  • in cases where the employee was partly to blame for the dismissal, whether or not it would be just to make such an order.

Where a tribunal orders the reinstatement or re-engagement of an employee who was dismissed without statutory dismissal and disciplinary procedures having been followed by the employer, and where failure to follow them was wholly or mainly the employer's fault, it will also award four weeks' pay to the employee (unless it considers that this would result in injustice to the employer).

If the employer fails to comply with the terms of an order for reinstatement or re-engagement the tribunal, on being notified of the failure, will make an award of compensation calculated in the ordinary manner provided for in the legislation (subtracting the award of four weeks' pay described in the previous paragraph). Also the tribunal will make an additional award of compensation to be paid by the employer, unless the employer satisfies the tribunal that it was not practicable to comply with the order for reinstatement or re engagement as the case may be.

Calculating Employment Tribunal Awards of Compensation

Compensation is made up of both a Basic award and a Compensatory award calculated as follows:

Basic award

The basic award is calculated in a similar method as a statutory redundancy payment by adding up the following amounts, but only continuous employment within the last 20 years can count:

  • 1½ weeks' pay for each complete year of employment when an employee was between the ages of 41 and 65 inclusive;
  • 1 week's pay for each complete year of employment when an employee was between the ages of 22 to 40 inclusive;
  • ½ week's pay for each complete year of employment when an employee was below the age of 22.

The maximum number of weeks' pay that may be awarded is 30. There is also a maximum week's pay that can be used to calculate the award. The limit on a week's pay may vary from year to year: the current figure is £280.

  • In trade union, health and safety, employee representative, workforce representative and occupational pension scheme trustee cases (see Interim Relief above), there is a minimum figure for the basic award. This minimum may vary from year to year.

The basic award, including the minimum award in trade union and health and safety cases, can be reduced if the employee:

  • contributed to some extent to the dismissal, or his or her conduct prior to the dismissal otherwise justified the reduction;
  • was within a year of age 65 at the effective date of termination;
  • unreasonably refused an offer of reinstatement or unreasonably prevented the employer from complying with an order of reinstatement;
  • has already been awarded or has received a redundancy payment;
  • has been awarded any amount in respect of the dismissal under a designated dismissal procedures agreement.

Where an employee has been dismissed without Statutory Dismissal and Disciplinary Procedures having been followed where they should have been (if failure to follow them was wholly or mainly the employer's fault) and the amount of the basic award is less than four weeks' pay (before any reduction for the last two reasons above), the tribunal will increase it to four weeks' pay unless it considers that this would result in injustice to the employer.

Compensatory Award

This award compensates the employee for the loss suffered as a result of the dismissal insofar as the employer is responsible for this loss. As well as covering loss of earnings between the dismissal and the hearing and an estimate of future loss, the tribunal will also consider matters such as loss of pension and other rights and any reasonable expenses incurred by the employee as a result of the dismissal.

The compensatory award is an amount the tribunal considers just and equitable in the circumstances, but there is a maximum compensatory award except in cases where the reason for the dismissal is that the employee made a protected disclosure under the Public Interest Disclosure Act 1998 or took action relating to Health and Safety. The maximum compensatory award may vary from year to year: the current figure is £56,800. The tribunal will reduce the award if it finds that the employee was partly to blame for the dismissal or the employee did not mitigate his or her loss: for example, by failing to make a reasonable effort to obtain another job. Certain payments made by the employer to the employee, for example wages in lieu of notice or an ex gratia payment, will normally result in a reduced compensatory award. The compensatory award will also be reduced by the amount of the employee's earnings from any other employment between the dismissal and the tribunal hearing.

Under the Statutory Dismissal and Disciplinary Procedures provisions, if an employer dismisses an employee without the statutory procedures having been completed where they applied and are not treated as having been complied with, and the failure to complete them was wholly or mainly the employer's fault, any compensatory award will be increased by at least 10 per cent and up to 50 per cent. Similarly, if the procedures were not completed and the fault lay wholly or mainly with the employee, any compensatory award will be reduced by 10 to 50 per cent. At what point on the scale between 10 and 50 per cent to make the increase or reduction is at the tribunal's discretion, and in exceptional cases it will be able to make one of less than 10 per cent or none at all.

Additional Award

This award compensates the employee for the additional loss suffered because of the employer's failure to comply with a tribunal's order for reinstatement or re-engagement. The additional award will be between 26 and 52 weeks' pay. There is a maximum week's pay that can be used to calculate the additional award. The limit on a week's pay may vary from year to year: the current figure is £280.

Note: Employment tribunals may however exceed these limits if the total compensation awarded (apart from the basic award) would otherwise be less than the arrears of pay element of the original award with which the employer failed to comply.

Interest on Tribunal Awards

Legislation provides that an employer who does not pay the compensation awarded by the tribunal within 42 days of the tribunal's decision, will be required to pay simple interest on the amount outstanding.

However, in relation to awards in cases of discrimination on the grounds of sex, race and disability, interest begins to accrue from the day after the day on which the tribunal's decision is sent to the parties. However no interest will be payable if the full amount of the award is paid to the complainant within 14 days of the decision being sent out.

Awards of Costs

Costs (expenses in Scotland) are not normally awarded in employment tribunal cases. They can be, however, if the tribunal decides that a party has acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in bringing or conducting the case. Costs of an adjournment or postponement may also be awarded when the adjournment or postponement was requested at the last minute by either party with no good reason or where it is necessary because a party has not come prepared to deal with issues which may be expected to arise at the hearing.

Financial Assistance for Tribunal Hearings

Legal aid is not available at employment tribunals, but some employees may be able to claim a limited amount of free advice under the legal advice and assistance scheme. This does not cover the cost of a legal representative at the hearing.

The Equal Opportunities Commission and the Commission for Racial Equality may also provide assistance in certain cases concerning alleged discrimination and/or discriminatory practices in the workplace.

Allowances are available from the tribunal office to cover the cost of travel to a hearing and other expenses both to the claimant and respondent, to the witnesses called and to representatives, including members of Citizens Advice Bureaux, but not full-time officials of employers' organisations or trade unions, barristers or solicitors or any other paid or unpaid professional person or organisation or organisations who represent parties as opposed to acting as their witnesses. Loss of earnings may also be paid up to a maximum. The tribunal can provide details of the current rate on the day of a hearing.

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