Employment Tribunal Awards

As we reported in our earlier blog, employment tribunal claims are on the rise. It is therefore more important than ever to be prepared by, for example, being aware of the potential financial risks and becoming familiar with the employment tribunal process.

Most common types of claim

The latest statistics, published by the Ministry of Justice, provide a snapshot of the most common types of claims presented at employment tribunals. These are:

• Unfair dismissal
• Breach of contract
• Disability discrimination
• Unauthorised deduction of wages.

The statistics are consistent with existing trends.

Unfair dismissal claims: maximum and median awards

In a successful unfair dismissal claim, compensation is made up of a basic award and a compensatory award. Each of these awards is subject to statutory limits which are reviewed each year.

• The maximum basic award of £21,570 is calculated by reference to length of service, age, and a week’s pay. In certain circumstances, a minimum award applies e.g., where the reason for dismissal was for joining a trade union or participating in trade union activities.
• The maximum compensatory award is the lower of £118,223 or 52 weeks’ gross pay. It is a 'just and equitable' amount based on the claimant's financial loss as a result of the dismissal. It covers, amongst other things, past and future loss of earnings, benefits and pension; expenses reasonably incurred in consequence of the dismissal e.g., travel costs to job interviews; and loss of statutory rights. The compensatory award can be adjusted, for example if there was contributory fault or either party failed to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures (although any such adjustment remains subject to the statutory maximum).

In some cases, an additional award may be made by a tribunal e.g., where the employer unreasonably fails to comply with a re-instatement or re-engagement order. The minimum additional award is the lower of £18,694 or 26 weeks’ gross pay. The maximum award is the lower of £37,388 or 52 weeks' gross pay.

The cap on compensation is disapplied in certain automatically unfair dismissals, for example, where the reason for the dismissal is for making a protected disclosure (whistleblowing) or raising health and safety concerns.

In the most recent set of statistics the maximum unfair dismissal award was £179,124 and the median £6,746.

Discrimination claims: maximum and median awards

There is no maximum limit on the amount of compensation a tribunal can award in a discrimination case. Last year the maximum disability discrimination award was £964,465 and the median £17,218.

Compensation is based on the loss suffered by the claimant, which may include past and future loss of earnings, benefits and pension; expenses; injury to feelings; personal injury (physical or psychiatric); and aggravated damages in particularly serious cases (considered as part of injury to feelings in Scotland).

In certain circumstances, the amount of compensation can be adjusted via an uplift or reduction. For example, there is an uplift of up to 25% in a successful sexual harassment claim if the employer is shown to have failed to take reasonable steps to prevent sexual harassment.

An ‘injury to feelings’ award will be based on the effect of the discriminatory conduct on the claimant. A tribunal will refer to guideline amounts known as 'Vento bands' which are increased annually. The current bands are set out as follows:

• Lower band (less serious cases / one-off or isolated incidents) – £1,200 to £12,100
• Middle band (more serious cases) – £12,100 to £36,400
• Upper band (most serious cases e.g., an extended campaign of harassment) – £36,400 to £60,700
• Exceptional cases - may exceed £60,700.

Employment tribunal process: mock employment tribunal

As well as being aware of the potential costs, it is good practice for those responsible for responding to claims to properly understand the tribunal process and what a hearing involves.

To find out more about the tribunal hearing process, come along to our in-person half-day mock employment tribunal for HR professionals. By attending, you will:

• Experience the tribunal hearing process, from start to end;
• Gain practical insights into case presentation and advocacy;
• Network with peers, legal professionals, and our expert team; and
• Participate in the subsequent Q&A and feedback session. 

Attendance is free but registration is required. Sign up here: Glasgow (Tuesday 28 October), Edinburgh (Tuesday 11 November), and Aberdeen (Wednesday 26 November).