Employment Tribunal Remedies and Compensation Types

Employment Tribunals in England and Wales can award a range of remedies where an employee or worker succeeds in a claim against an employer. These remedies are primarily financial, but in some cases the tribunal can also order reinstatement or other corrective actions.

The legal framework for remedies is set out in the Employment Rights Act 1996 and the Equality Act 2010, alongside tribunal procedural rules and case law principles governing compensation assessment.

The purpose of tribunal remedies is not to punish employers, but to compensate claimants for losses caused by unlawful conduct, and in some cases to restore employment relationships where appropriate.

Overview of Employment Tribunal Remedies

If a claim succeeds, an Employment Tribunal may award one or more of the following remedies:

• Financial compensation
• Reinstatement to the original job
• Re-engagement in a different role
• Recommendation orders in discrimination cases (limited use)
• Interest on awards
• Compensation uplifts or reductions in certain circumstances

In practice, the majority of cases result in financial compensation rather than reinstatement.

Unfair Dismissal Compensation Types

Unfair dismissal claims typically involve two main components of compensation.

1. Basic Award

The basic award is calculated in a similar way to statutory redundancy pay. It is based on:

• Age of the employee
• Length of continuous service (up to 20 years)
• Weekly pay (subject to a statutory cap)

The calculation formula broadly provides:

• 0.5 week's pay for each year under age 22
• 1 week's pay for each year aged 22–40
• 1.5 week's pay for each year aged 41 and over

The basic award may be reduced in certain circumstances, such as misconduct or prior redundancy payments.

2. Compensatory Award

The compensatory award is the main financial remedy in unfair dismissal claims.

It is designed to compensate for actual financial loss caused by the dismissal, including:

• Loss of earnings (past and future)
• Loss of pension contributions
• Loss of statutory employment rights
• Loss of benefits linked to employment
• Reasonable job search costs

The tribunal applies a “just and equitable” assessment when calculating the final figure.

There is normally a statutory cap on the compensatory award for unfair dismissal claims, although exceptions apply in whistleblowing and certain health and safety dismissal cases.

3. Reinstatement and Re-engagement

Tribunals may order:

• Reinstatement: return to the original job as if dismissal never occurred
• Re-engagement: employment in a comparable or suitable alternative role

These remedies are relatively rare in practice, as they require continued working relationships.

If an employer refuses to comply with such an order, the tribunal may instead increase compensation.

Discrimination Compensation Types

Discrimination claims under the Equality Act 2010 are different because compensation is not capped and includes broader categories of loss.

1. Financial Loss

This includes:

• Loss of earnings
• Loss of promotion opportunities
• Loss of pension benefits
• Future financial losses where ongoing impact is proven

2. Injury to Feelings

A major component of discrimination compensation is “injury to feelings”.

This compensates for:

• Distress
• Humiliation
• Anxiety
• Emotional impact caused by discriminatory conduct

Tribunals apply guideline ranges known as the Vento bands, which are updated periodically. These bands divide awards into:

• Lower band (less serious cases)
• Middle band (more serious or sustained discrimination)
• Upper band (most serious or prolonged discriminatory conduct)

In exceptional cases, awards can exceed the upper band.

3. Psychiatric Injury and Aggravated Damages

In some cases, claimants may also receive:

• Compensation for diagnosed psychiatric injury
• Aggravated damages where employer conduct has been particularly oppressive or malicious

These are separate from injury to feelings awards.

Whistleblowing and Health and Safety Compensation

Certain claims attract enhanced protection and uncapped compensation.

Protected Disclosure (Whistleblowing)

Where an employee is dismissed or suffers detriment for whistleblowing:

• Compensation is unlimited
• Includes full financial loss
• May include injury to feelings and other consequential losses

Health and Safety Dismissal

Dismissals linked to health and safety concerns may also result in uncapped compensation, depending on the legal basis of the claim.

Wages, Holiday Pay and Contractual Claims

Employment Tribunals can also award compensation for unlawful deductions from wages and related contractual entitlements.

These may include:

• Unpaid wages
• Overtime pay
• Holiday pay
• Notice pay
• Breach of contract claims (subject to jurisdictional limits)

These awards are generally calculated as straightforward arrears rather than discretionary compensation.

Additional Types of Tribunal Awards

1. ACAS Uplift or Reduction

Tribunals may adjust compensation by up to 25% where either party has unreasonably failed to follow the ACAS Code of Practice, particularly in disciplinary and grievance procedures.

2. Interest on Awards

Interest may be added to compensation in certain claims, particularly discrimination cases and wage-related claims.

3. Costs Orders

Although rare, tribunals may order costs where a party has acted unreasonably, vexatiously, or abusively during proceedings.

Costs awards are not automatic and are applied restrictively.

Factors Affecting Compensation Levels

Employment Tribunal compensation is influenced by several key factors:

• Length of employment
• Salary and benefits
• Efforts to mitigate loss (such as seeking new work)
• Strength of evidence
• Conduct of both parties
• Whether dismissal would have occurred in any event
• Severity of discriminatory conduct (if applicable)

Tribunals aim to place the claimant in the position they would have been in but for the unlawful act, so far as money can achieve this.

Time Limits for Tribunal Claims

Most Employment Tribunal claims must be brought within:

• 3 months less one day from the act complained of (such as dismissal or discrimination)

For some claims, particularly discrimination or ongoing conduct, time may run from the last act in a continuing course of behaviour.

Early ACAS Early Conciliation is generally required before submitting a claim.

Common Misconceptions About Compensation

Compensation is automatic after winning

Not all successful claims result in large awards. Some claims result in modest payments or technical findings with limited financial loss.

Tribunals award punishment damages

Tribunals do not generally award punitive damages. Compensation is intended to reflect loss rather than punish employers.

Injury to feelings applies to all claims

Injury to feelings is mainly limited to discrimination and certain whistleblowing-related claims, not ordinary unfair dismissal.

Practical Steps When Assessing a Claim

Key practical considerations include:

• Identifying all potential heads of loss early
• Gathering payslips, contracts, and financial records
• Tracking job applications and mitigation efforts
• Preparing a schedule of loss
• Understanding which claims are capped or uncapped
• Considering ACAS Early Conciliation outcomes

Proper calculation of loss is central to tribunal preparation.

Key Takeaways

Employment Tribunal remedies in England and Wales are primarily financial and are designed to compensate loss rather than punish employers. The main categories include basic and compensatory awards in unfair dismissal claims, uncapped compensation in discrimination and whistleblowing cases, and additional payments such as injury to feelings, wage arrears, and ACAS uplifts.

The final compensation depends on financial loss, evidence, and legal classification of the claim. Understanding the structure of tribunal remedies is essential for assessing potential outcomes and preparing a claim effectively.