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.
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Basic Award - MAXIMUM AWARD (currently £8,400) 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 £280 per
week.
-
Compensatory Award - MAXIMUM AWARD (£56,800) comprises three elements and
is based on net pay for elements i & ii and gross pay for element iii
:
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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.
-
Additional Award - MAXIMUM AWARD (£14,560) 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 £280 per week.
TOTAL MAXIMUM AWARD = £79,760
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.
