The unfair dismissal compensatory award
The unfair dismissal compensatory award

The following Employment guidance note provides comprehensive and up to date legal information covering:

  • The unfair dismissal compensatory award
  • Calculation
  • Loss of earnings after dismissal caused by illness or other incapacity
  • Loss of earnings after dismissal with more than one cause
  • Accelerated receipt
  • Duty to mitigate
  • Salary increases and benefits accruing post-dismissal
  • Expenses and benefits
  • Loss of statutory rights
  • Loss of long notice periods
  • more

FORTHCOMING CHANGE: From April 2020, employer National Insurance contributions (NICs) will be payable on termination payments above £30,000. This change will be implemented by the National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019. It was originally intended for this change to take effect from 6 April 2018 but on 2 November 2017, it was announced the Bill would be delayed and it would take effect from 6 April 2019. Then in the Budget 2018 it was announced that the change would actually take effect on 6 April 2020. In October 2019 draft regulations, the Social Security (Contributions) (Amendment No X) 2020, setting out how the new Class 1A Employer NIC charge will be reported and collected in real time through PAYE were published for consultation.

For more information, see reports of 23 November 2017, 30 October 2018, LNB News 25/04/2019 65, LNB News 01/05/2019 1, LNB News 26/07/2019 3 and LNB News 17/10/2019 86.

An award of compensation for unfair dismissal generally consists of a basic award and a compensatory award. The compensatory award is intended to compensate the employee for financial losses suffered as a result of the unfair dismissal. It may be subject to various increases or deductions.

The basic award is considered in Practice Note: The basic award.