Q&As

What is an employee’s entitlement to compensation for loss of earnings as part of the compensatory award for unfair dismissal in circumstances where the employee has not worked since termination because he is medically unfit for work?

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Published on: 05 May 2017
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The Compensatory award for Unfair dismissal is such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the employee as a result of dismissal and in so far as that loss is attributable to actions of the employer. It is intended to compensate the employee rather than to punish the employer. No account should be taken of any period during which losses are caused by something other than the dismissal.

The starting point in assessing compensation for loss of

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Jurisdiction(s):
United Kingdom
Key definition:
Earnings definition
What does Earnings mean?

The annual profits of a company after deduction of tax, dividends to preference shareholders and bondholders. Earnings are usually expressed on a per-share basis (eg 7p), and the earnings per share (EPS) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period. For example, earnings of £2 million, with 10 million shares in issue would give an EPS of 20p. You may see earnings used in several ways: • reported earnings: the figure in the company’s accounts • underlying earnings: the figure derived from reported earnings by excluding any one-off items (eg profit from the sale of land which is not part of the company’s normal business) • diluted earnings: earnings after adjustment has been made for shares that may be issued in the future if holders of options, warrants and convertibles choose to exercise their rights.

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