Employment tribunals - how to work out your basic award if you are claiming unfair dismissal
If you have been unfairly dismissed, you can claim both a basic award and a compensatory award. This document tells you how to calculate your basic award.
What is the basic award
If a tribunal decides you have been unfairly dismissed, you will get compensation which is made up of:
- a basic award, which is a fixed sum and calculated to a statutory formula
- a compensatory award, which is to compensate you for the actual money you have lost as a result of losing your job.
The amount that you can get for your basic award depends on:
- how long you have worked for your employer up to the date of your dismissal
- how old you are at the date of your dismissal
- how much your weekly pay is before tax and national insurance are deducted (known as your gross weekly pay).
How to calculate your basic award
- Work out the date you were dismissed. If you are in any doubt about this, it is safest to take the last day you worked as your date of dismissal.
- Count backwards from this date the number of complete years you have worked for your employer. So if you were dismissed on 24 June 2014, and you started work on 23 June 2012, you have been employed for two complete years
- Calculate the appropriate amount for each of those complete years you have worked.
How to calculate your basic award if you have worked for your employer for two years or more
There is a ready-reckoner to calculate your basic award once you know how many complete years you have worked for your employer, at www.gov.uk. It works in the same way for the basic award and for statutory redundancy pay if you have worked for your employer for two years or more.
You cannot count more than 20 years employment when you are doing the calculation, even if you have worked for your employer for longer than 20 years.
If you've worked for your employer for more than 2 years, your basic award will be:
- 1.5 weeks' pay for each complete year of employment when you were 41 or over
- 1 week's pay for each complete year of employment when you were between the ages of 22 and 40 inclusive
- half a week's pay for each complete year of employment when you were below the age of 22.
Is there a maximum for what counts as a week's pay?
There is a maximum amount that can count as a week's pay when you are doing this calculation. If your gross weekly pay is more than £489, you can only claim up to £489 per week.
This amount applies if you were dismissed on or after 6 April 2017.
If you were dismissed on or after 6 April 2016, the amount is £479.
If you have been dismissed for a reason which is automatically unfair
There are some special cases where you get a set minimum basic award. However, they are quite rare as they only apply if you have been working as a health and safety representative, or trade union representative and have been dismissed for this reason.
If you have been dismissed for some other reason (other than being a health and safety rep or a union rep) which is automatically unfair, and you have not worked for long enough to claim ordinary dismissal, then you will not get a basic award.
Automatically unfair reasons for dismissal include
- trying to assert your statutory rights
- whistleblowing about a concern at work
- health and safety.
You will qualify to claim ordinary unfair dismissal if:
- you started work for you employer on or after 6 April 2012 and you have worked there for two years, or
- you started work for your employer before 6 April 2012, and you have worked there for one year.
Can your basic award be reduced?
If you are awarded a basic award, the tribunal might reduce it if:
- you have been offered your job back by your employer but have refused to go back. If the tribunal thinks it would have been reasonable for you to go back to your job, it may reduce your basic award
- where the tribunal thinks your conduct has been at fault and it should reduce your award as a result
- where you have received statutory redundancy pay.
If the tribunal thinks your basic award should be reduced because of your conduct
For a tribunal to reduce your basic award because of your conduct, it will have to be sure that you were guilty of misconduct and that this conduct was bad enough to justify reducing your award. Conduct bad enough to mean your basic award is reduced would include things like stealing from your employer, or deliberately breaching health and safety rules and putting colleagues at risk.
So if, for example, you admit stealing from your employer, and you can only claim unfair dismissal because your employer did not follow a completely fair procedure before dismissing you, there is little point in your pursuing your claim. You would not be entitled to a compensatory award because you are only claiming unfair dismissal for a 'procedural' reason, and your basic award would be reduced because of your behaviour.