The unfair dismissal compensatory award

Copyright © 2025 LexisNexis
Published by a LexisNexis Employment expert
Practice notes
In-house

The unfair dismissal compensatory award

Copyright © 2025 LexisNexis

Published by a LexisNexis Employment expert

Practice notes
In-house
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An Award of compensation for Unfair dismissal generally consists of a basic award and a Compensatory award. The compensatory award is intended to compensate the employee for financial losses suffered as a result of the unfair dismissal. It may be subject to various increases or deductions.

The basic award is considered in Practice Note: The basic award. Note the remarks in that Practice Note about the obligation on the employment tribunal to first explain to the successful claimant the remedies of reinstatement and re-engagement.

For guidance on unfair dismissal remedies generally, including reinstatement and re-engagement, see Practice Note: Unfair dismissal remedies—general.

See also the Lexis+® UK online calculators:

  1. •

    basic award calculator, and

  2. •

    unfair dismissal schedule of loss application (and the related Practice Note: Guide to using the Lexis+® UK Employment Schedule of Loss application)

The essential steps for calculating the compensatory award

The basic approach, as set out by the Court of Appeal in Digital Equipment v Clements (No 2) is set out below.

Step (1): Calculate loss sustained

Calculate the loss that the employee

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Unfair dismissal definition
What does Unfair dismissal mean?

The concept that an employer has not dismissed the employee for a potentially fair reason or under a fair procedure and as such the dismissal was unfair.

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