What compensation might I get from my employer if I have been unfairly dismissed?

The amount you might be awarded will depend on the individual circumstances of the case. In most successful unfair dismissal claims, any financial award is made up of a basic award and a compensatory award.  

The basic award is designed to compensate for your loss of job security and is almost identical to statutory redundancy payments

The compensatory award for unfair dismissal has a statutory limit which is reviewed every year. In 2020, it was set at £88,519 or 12 months’ wages, whichever is the lower. 

This limit doesn’t apply in certain specific scenarios, for example if you are dismissed for raising health and safety concerns, or for ‘blowing the whistle’ on wrongdoing at work. 

Despite the occasional press report of big sums won in a few employment cases, the typical award is well below the theoretical maximum. The median tribunal award in 2018–2019 for unfair dismissal was only £6,243. 

The aim of the compensatory award is to try to make good your financial loss and will take into account, for example, the following: 

  • any immediate loss of earnings (i.e. losses to date); 

  • future loss of earnings (e.g. anticipated loss until you find a new job); 

  • loss of statutory employment protection rights (a set sum of around £300 to acknowledge the fact that you will have to start accruing length-of-service-related benefits from scratch); and 

  • loss of pension rights. 

In a tribunal claim for unfair dismissal, there is no compensation for the hurt and distress your employer has caused you, no matter how badly they behaved when dismissing you. Instead, unfair dismissal compensation is limited to your ‘economic’ losses – mainly the wages you would have earned had you stayed in work.  

The position is different if you claim that your dismissal was discriminatory, in breach of the Equality Act 2010 (for example, because you were pregnant, or because of race or disability). In this kind of claim, an award for injury to feelings can be made, along with compensation for lost earnings, to reflect the hurt you have suffered. In addition, there is no cap on the compensation you can be awarded in this type of claim. 

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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