What is the unfair dismissal basic award?
Where a tribunal makes an award of compensation for unfair dismissal the award will consist of a basic award and a compensatory award. The basic award is calculated according to age, length of service, and normal weekly pay in the same way as a statutory redundancy payment. For these purposes, where the effective date of termination is on or after 6 April 2021, the maximum amount of a week’s pay is £544.
A minimum basic award of £6,634 is payable where the employee was dismissed on grounds of trade union membership or activities, for carrying out legitimate health and safety activities as a health and safety representative, for carrying out functions as an occupational pension scheme trustee, or for carrying out functions as an elected employee representative.
The compensatory award is such amount as the tribunal considers just and equitable in all the circumstances, having regard to the loss sustained by the applicant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer. It includes, for example, loss of wages from the date of termination until the date of the hearing, loss of benefits in kind, and loss of future earnings.
The maximum compensatory award is £89,493 where the effective date of termination was on or after 6 April 2021. There is an additional cap of 52 times the claimant’s weekly pay, which will apply if this is lower than the overall cap of £89,493. No maximum applies, however, where a person is regarded as unfairly dismissed for one of a number of reasons related to health and safety or for making a protected disclosure.
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