Unfair Dismissal – Is It Worth It?

Last week I talked about basic unfair dismissal, concentrating on what an employee who has been dismissed needs to understand when bringing a complaint before an Employment Tribunal. Today I will concentrate on the question of compensation and cost.

There is no doubt that bringing and defending Tribunal claims can be costly both in terms of money, personal time, stress and worry.

Whether this cost is worth it depends on how strong your claim is and how much compensation you are likely to be awarded by the Tribunal if you win. In terms of the financial cost of bringing a claim there is nothing to stop you filling in the form yourself and representing yourself before the Tribunal. You can also get help from the Citizens Advice Bureau or a union if you are a member. Some solicitors might also take your case on a ‘no win no fee’ basis if the solicitor thinks you have a strong claim.

Whether you represent yourself or get someone else to help, you have to put a lot of time into preparing you case carefully. This means getting together all the relevant paperwork; your contract of employment, letters you have received and sent to your employer, notes of meetings that either you have made or your employer has prepared. It also means preparing a detailed statement of your evidence, setting out how you were treated.

Bear in mind, if you have no documentary evidence supporting your claim and your employer has paperwork supporting its defence you are likely to lose.

If neither you or your employer have documentary evidence, the outcome will depend on whether the Tribunal believe your verbal evidence more than they believe the employers. This is something of a lottery.

To maximise your chances of winning you need good documentary evidence and good solid witnesses. If people are reluctant to give evidence for you there is little point in forcing them to because they are unlikely to say what you want.

You should also understand that giving evidence is stressful; you are likely to be cross-examined by the employer’s representative quite closely. You will also have to cross-examine your ex-employer. Only bring a claim if you feel confident enough to speak in the tribunal.

If you are advised that your case is hopeless, think carefully before making a claim. Costs are rarely awarded against the unsuccessful party but Tribunals do have a discretion to award costs to the winner if the Tribunal thinks that the claim was misconceived.

However, if you do have a good claim and have prepared your case well, including complying with any orders given by the Tribunal and then you attend the Tribunal and present your case clearly, you should win. What a good feeling!

So that’s the hard part over; how much will you get?

You are entitled to ask to be reinstated in your old job. However, most Claimants do not want this and it is rarely awarded. More likely, you simply want some compensation.

First, you are entitled to what is called the Basic Award. This is calculated in exactly the same way as a Statutory Redundancy Payment. For most people this will be one week’s pay for each complete year of service, with a week’s pay being capped at £280. Let’s say you were employed by your ex-employer for ten years and you are 40 years old. You earned £22,000 per annum; your Basic Award will be 10 x £280 = £2,800. Not very much.

You may then be entitled to a Compensatory Award. This is calculated by working out your likely financial losses up to a maximum of £56,800.

If you got another job one month after you were sacked at the same rate of pay, your compensatory award will be little more than one month’s pay.

If you do not have another job by the time you win your claim, the Tribunal will award you your losses from the date you were last paid to the date of the hearing and then loss of earnings until the Tribunal think you will get another job. This can often be a shorter period than you think realistic. You should remember that the Tribunal will expect you to try quite hard to find a new job. In fact, sometimes the employers’ representatives will ask for evidence of the local job market and question you on which vacancies you have applied for.

Unless you are looking at a significant financial award think carefully before making a claim. I would rarely advise anyone to make a claim of unfair dismissal on a point of principle alone. Getting another job can be difficult if you took your last employer to a Tribunal. The point of making a claim is firstly, because you were unfairly treated but more importantly, the financial compensation you will get. If this compensation is outweighed by the financial and personal cost think carefully before beginning the process.

Published 27/09/2006.