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Frequently asked questions

Compensation

How is compensation calculated?

Compensation is comprised of three elements: the basic award that compensates for loss of job; the compensatory award that compensates for loss of earnings whilst the appellant looks for alternate employment and an additional award which is made when a recommendation of reinstatement (or reinstatement with a lesser penalty) is not accepted.

1. Basic Award - MAXIMUM AWARD (currently £11,400) is calculated according to length of service (up to a maximum of 20 years) and the employee's age at the date of dismissal:
   • 1/2 week's pay for each full year in which the employee was under 22;
   • 1 week's pay for each full year in which the employee was over 22 but under 41; and
   • 11/2 week's pay for each full year in which the employee was 41 or over.
   The pay is gross pay at the date of dismissal up to a maximum of £350 per week.
2. Compensatory Award - MAXIMUM AWARD (£66,200) comprises three elements and is based on net pay for elements i & ii and gross pay for element iii :
   • Loss of pay from dismissal to the date of hearing. This must be reduced to take account of any earnings or benefits received.
   • Future loss of earnings. The Board will take into account the age of the employee and the speed in which they are likely to find alternate employment in the area in which they live. It is usually awarded for either 13 or 26 weeks and again can be subject to reductions for earnings or benefits received.
   • Loss of Pension. This compensates the appellant for loss of pension entitlement for the period from dismissal until the end of the future loss of earnings period. One of four formulae is used depending on appellant's employment status and whether in receipt of a pension at the time of award.
3. Additional Award - MAXIMUM AWARD (£18,200) this is given where a Department or Agency have not accepted a recommendation of reinstatement from the Board. The award is based on gross pay for a period between 26 and 52 weeks with a maximum of £350 per week.

TOTAL MAXIMUM AWARD = £95,800

Increase/Reduction to Amount of Compensation Awarded

The compensation awarded by the Board may be increased or reduced from 100% for one of three reasons. Failure by a Department or Agency to follow the statutory dismissal and disciplinary procedures, which were brought into effect by the Employment Act 2002 (Dispute Resolutions) Regulations 2004, will result in an adjustment to the level of compensation awarded. Equally, if the Board finds that an employee has been dismissed unfairly but has failed to follow the statutory procedure (for instances they did not attend the disciplinary hearing without good cause), compensation will be reduced.

Reductions can also be made if the case was found procedurally unfair (the ‘Polkey’ factor), but, apart from that the dismissal was justifiable and also if it is felt that the appellant contributed to the circumstances which led to dismissal (the contributory fault factor). Representations are sought from both parties before the Board take a decision on any reduction being made.

When compiling representations the following should be considered:

• ‘Polkey’ factor what was the likelihood of dismissal had the procedures been followed correctly?
• Contributory fault did the appellant’s actions lead to dismissal. The representations should note down why it is/is not felt that the appellant is wholly or partly responsible and how much their actions impacted on the decision to dismiss.

The basic award and compensatory parts of the award can be reduced to reflect the level of contributory fault; with the reduction being made only to the compensatory part of the award in regard to the ‘Polkey’ factor. Where both are being deducted from the compensatory part of the award, the ‘Polkey’ reduction is always made first.

An award which has been made under the Civil Service Compensation Scheme will be taken into account when the Board calculates its award.