What is the Basic Award?

The basic award is a statutory payment for unfair dismissal claims, calculated like a redundancy payment under section 119 of the Employment Rights Act 1996.

The basic award provides a fixed sum based on your age, length of service and weekly pay. It applies mainly to unfair or constructive dismissal cases where you qualify after two years' service. Tribunals must award it unless specific exceptions apply, such as gross misconduct.

This award does not cover your actual losses – that's the compensatory award. For example, a 45-year-old with 10 years' service earning £600 a week might get 15 weeks' pay (1.5 weeks per year), totalling £9,000 before any cap.

How to Calculate the Basic Award Step-by-Step

Follow this formula: weeks' pay (capped at £700 from 6 April 2024) x multiplier based on age and service (max 30 weeks, £21,000 total).

Start with your week's pay, using gross pay for your normal working hours. It's capped at £700 weekly from April 2024 – higher earners get the cap. Continuous service counts back to when you started, excluding gaps under four weeks.

Age bands: under 22 = 0.5 weeks per year; 22-40 = 1 week; 41+ = 1.5 weeks. Use only your age at dismissal and cap service at 20 years. For instance, a 50-year-old with 25 years service gets 1.5 x 20 = 30 weeks max.

Real example: Sarah, aged 35, 8 years service, £550 week. Calculation: 8 weeks x £550 = £4,400. Simple and predictable, tribunals use the effective date of termination.

• Gather payslips for week's pay evidence.
• Count service precisely – tribunals check contracts.

1. 1. Determine week's pay (cap £700).
2. 2. Calculate service years (max 20).
3. 3. Apply age multiplier per year.
4. 4. Multiply total weeks by capped pay.

The Compensatory Award Explained

This covers your actual financial losses from the dismissal, like lost earnings, under section 123 ERA 1996.

Unlike the basic award, compensatory covers immediate loss (notice pay, holiday), job search time, future losses until new job or retirement, and non-financial like pension loss. Tribunals 'make good' your position as if fairly treated.

Losses must be foreseeable and caused by the dismissal. Mitigation requires reasonable job hunting efforts – evidence emails and applications. Example: 6 months unemployment at £2,000/month = £12,000 basic loss.

How to Calculate the Compensatory Award

Build a schedule of loss: past losses + future losses – mitigation earnings, capped at £115,115 or 52 weeks' pay.

Past losses: unpaid notice, holiday pay, immediate unemployment. Future: projected earnings gap, using comparators or averages. Deduct benefits recouped by DWP and new earnings.

Pensions: employer contributions lost. Include bonuses, commission if evidenced. Tribunals use multipliers for long-term loss, crediting accelerated receipt.

Example: £40k salary, 3 months gap £10k loss, 1 year future £40k less £20k new job = £30k total compensatory.

• Immediate loss: EDT to new job.
• Future loss: to retirement or settlement date.
• Mitigation: deduct all earnings post-dismissal.

1. 1. List all heads of loss.
2. 2. Evidence with payslips, contracts.
3. 3. Project future with realism.
4. 4. Deduct mitigation and recoupment.

Adjustments, Uplifts, Reductions and Caps

Awards adjust for ACAS uplift (up to 25%), Polkey reductions, contributory fault; overall cap £115,115 for compensatory.

Uplift applies if employer unreasonably failed ACAS Code – tribunals assess up to 25% on compensatory. Reductions: 100% Polkey (if fair process would dismiss anyway), or % for your blame (contributory conduct).

Basic award max £21,000; compensatory £115,115 (2024 figures). Combined tax-free to £30,000 usually. Order: uplift first, then Polkey/contributory, then cap.

Example: £50k compensatory + 20% uplift = £60k, reduced 25% fault = £45k.

• Uplift: ACAS breach evidence.
• Polkey: hypothetical fair dismissal chance.
• Contributory: your misconduct %.

Compensation in Special Cases Like Discrimination

Discrimination uses Vento bands for injury to feelings (£1,200-£58,700 2024), uncapped compensatory.

Unfair dismissal caps don't bind discrimination (Equality Act 2010). Injury to feelings: lower £1,200-£11,700; middle £11,700-£35,200; upper £35,200-£58,700; exceptional over. Aggravated damages rare.

Whistleblowing, redundancy similar to unfair dismissal. Include arrears, bonuses separately.

Example: Race discrimination dismissal: basic + uncapped loss + £20k injury to feelings.

Preparing Your Schedule of Loss

A detailed table of claimed losses strengthens your case – tribunals expect it.

Format as table: columns for description, calculation, evidence. Update at remedy hearing. Covers all awards, adjustments.

Common mistake: forgetting pension, benefits. Use experts for complex losses.

Submit with ET1 or bundle – helps settlement too.

• Past losses.
• Future losses.
• Non-financial (if applicable).

1. 1. Use spreadsheet template.
2. 2. Gather 2 years' payslips.
3. 3. Project conservatively.
4. 4. Get witness comparators.