Employment Tribunal Compensation Updated

9th June 2023 Every year the Government reviews the limits on the awards that Employment Tribunals can make. Furthermore, the compensation limits for “injury to feelings” within discrimination claims are also updated annually.

There are limits to compensation that the Employment Tribunal can award in certain types of claims, most notably for normal unfair dismissal cases. As unfair dismissal cases persistently make up a significant proportion of claims issued in the Employment Tribunals this is something that employers and individual employees considering bringing such claims need to be aware of. The relevant figures are as follows:-

Basic Award

The calculation for the “basic award” is normally awarded in addition, which is calculated by reference to the age of the employee at the date of dismissal, the number of completed years of service with their former employer, and their weekly wage. However, for this part of the compensation the figure for “weekly pay” is subject to a maximum figure.

From the 6th April 2023 the figure for “weekly pay” is limited to £643

(nb previously £571).  

Compensatory Award

The calculation of the compensatory aware is essentially based on the actual losses the individual employee has suffered because of the unfair dismissal. Therefore, the standard measure of this loss is the actual loss of income and benefits in kind. Any income from new employment will normally be deducted from the losses within the assessment made by the Employment Tribunal. In addition, it is important to note that the Employment Tribunal can also make deductions from the assessment if it concludes that the employee was at fault him or herself for the dismissal to any significant extent.

For any employee unfairly dismissed from the 6th April 2023 onwards the maximum figure that the Employment Tribunal can award for the “compensatory award” is one year gross pay, or £105,707 – whichever is lower.

(nb For dismissals that took place in the year ending the 5th April 2023 the maximum “compensatory award” was £93,878).

These increases reflect the increase in the retail price index in the year ending September 2022.

Compensation for “injury to feelings” within discrimination claims

A distinct element of compensation that an Employment Tribunal can order in claims of unlawful discrimination is for “injury to feelings” that the worker suffered arising from the act of unlawful discrimination. Usually, it is important for the individual to provide some documentary evidence to support this part of the claim, such as a medical report when psychological harm resulted from the discrimination. The Employment Tribunals have generally approached assessment to injury to feelings by considering whether the injury sustained fell within one of three bands, and assessed compensation by reference to the facts of the case and the limits on each band. So, the severity of the injury to feelings will be all important in this area.

For claims presented to the Employment Tribunal on or after the 6th April 2023 the relative bands, under the “Vento” guidelines are as follows:-

Lower band (less serious cases)

     -    Range between £1,100 to £11,200

Middle band (more serious cases)

     -    Range between £11,200 to £33,700

Upper band (the most serious cases)

     -    Range between £33,700 and £56,200

Only the very exceptional serious cases may merit an award higher than £56,200.     

If you need any further advice on any matter raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.