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Compensation awards for unfair dismissal

Where the Tribunal finds that an employee has been unfairly dismissed it will provide the alternative remedy of an award of compensation. Such an award will usually consist of:

  • A basic award , based on the employee's age, length of service and weekly pay and calculated in a similar way to a redundancy payment;
  • A compensatory award , which is an amount Employment the Tribunal considers just and equitable for the loss which the employee has suffered because of the dismissal.

Basic award

The basic award is calculated by adding up the following amounts, but only continuous employment within the last 20 years can count:

  • 1 and a half 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 and 40 inclusive;
  • Half a 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 therefore 20. 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 £475.)

Try our Unfair Dismissal Calculator to see how much compensation you may be entitled to.