The award to the claimant of financial compensation is the most common outcome of a successful tribunal claim.
Compensation in discrimination cases
There is no limit on the amount of compensation which can be awarded in cases of unlawful discrimination. Read how to prevent discrimination and value diversity.
Compensation in unfair dismissal cases
There are three types of compensation for unfair dismissal:
- basic awards
- compensatory awards
- additional awards
The basic award depends on:
- The employee's age - counting back from the date of dismissal, they receive 1.5 weeks' pay for each year of employment after their 41st birthday, one week's pay for each year of employment after their 22nd birthday and 0.5 week's pay for each year of employment up to their 22nd birthday.
- Their length of service with you - counting back from the date of dismissal, this is capped at 20 years.
- Their weekly pay - this is subject to the statutory limit on a week's pay, which is currently £500.
- the maximum basic award is 1.5 x 20 = 30 weeks' pay
- the maximum amount that can be awarded is 30 x £500 = £15,000
In most unfair dismissal cases, there is no minimum basic award.
The compensatory award is based on the tribunal's/arbitrator's assessment of the employee's loss of earnings between the dismissal and the tribunal/arbitration hearing, and the likely future loss of earnings, loss of pension rights etc.
Reinstatement or re-engagement orders
If you do not comply with an order for reinstatement or re-engagement the tribunal/arbitrator can make an additional award.
The award is on top of any previous award and can be between 26 and 52 weeks' pay - although this is again subject to the £500 limit on a week's pay.
Compensation in collective redundancy cases - failure to consult representatives
In a collective redundancy situation, you have a legal duty to consult with representatives of those employees affected by the proposed redundancies.
If you fail to do this, an employee or a representative may apply to a tribunal for a protective award. If the tribunal decides in their favour, it may order you to pay each affected employee up to 90 days' pay.
This payment is calculated on the basis of a week's pay. Note that if you are made to pay such an award, there is no statutory cap on a week's pay.
For more information on collective redundancy consultation, see redundancy: the options.
Compensation in business transfer cases - failure to inform and consult representatives
In business transfer situations, you must inform and consult with representatives of those employees affected by the transfer.
If you fail to do this, an employee or a representative may apply to a tribunal for compensation. If the tribunal or arbitrator decides in their favour, it may award compensation to each affected employee of up to 13 weeks' pay.
Note that for such awards, there is no statutory cap on a week's pay.
If you do not require an employee to work on a day when they would normally be contractually obliged to work, you may be required to make a guarantee payment to them. Failure to pay an employee who is entitled to guarantee pay is unlawful and the employee may take you to a tribunal. If the tribunal or arbitrator finds in the employee's favour you may be ordered to pay the employee the guarantee pay.
In order to be entitled to guarantee pay, the employee must meet certain requirements. For more information on guarantee pay and to find out if your employees may be entitled to guarantee pay, see guarantee pay – entitlement.
Compensation in trade union-related cases
There is a separate award for cases in which the tribunal/arbitrator finds that you have made unlawful inducements to individuals in relation to their trade union membership/activities and collective bargaining.
Read more on trade union membership rights in the workplace.
Compensation in breach-of-contract cases
Where an employee makes a breach-of-contract claim to an industrial tribunal (or an employer makes a counterclaim), there is a maximum amount that may be awarded in respect of that claim (or of a number of claims arising from the same breach of contract).
For details of minimum and maximum amounts and how these may be adjusted, see tribunal/arbitration compensation amounts and adjustments.