No. It does not.

There has never been much doubt about this. Any uncertainty has been put to rest by the EAT in Tao Herbs & Acupuncture Ltd v Jin.

Judge McMullen Q.C. said:

19. The third ground advanced in this application relates to section 123. It is contended that the award to the Claimant was not just and equitable because it was substantial. I reject this as a proposition of law. In the calculation of loss for unfair dismissal the prime consideration is the loss suffered by the Claimant attributable to the action of the employer. The vehicle for the submission today is that if this award has to be paid, the business will go into liquidation.

20. That is not the correct approach to the assessment of an award for unfair dismissal, which does not pay attention to the ability of the employer to pay. There are places in the employment protection canon where ability to pay is a feature (see for example the costs regime). But in the assessment of damages for a statutory tort, the possibility that the employer will be in difficulty paying an award is not a relevant consideration.

This does not add significantly to our legal understanding, but it is a clear and concise statement of principle. It might be useful, therefore, in convincing a stubborn respondent that this is not a line worth taking.

One word of caution: while ability to pay will not change the tribunal’s decision there is, unfortunately, a gap between obtaining a tribunal decision and getting the money. This needs to be considered when making decisions about litigation.

Having a right, for example the right not to be unfairly dismissed, or to have reasonable adjustments made to your disability, is one thing. But on its own, it is not worth much.

The best way of explaining why is a worked example:

s94 of the Employment Rights Act 1996 creates the right not to be unfairly dismissed. It does this simply enough, by saying in effect ‘An employee must not be unfairly dismissed by his employer.’ This right is then explained and detailed in the rest of the ERA.

But on its own, this really doesn’t do anything. You may have a right, but what happens if it is breached? What, in other words, is your remedy?

This is set out in some of the later sections of the ERA, s112-126. These set out the basic and compensatory awards – as well as the various re-employment orders that might be made

So this far, you have both a right and a remedy. But even this isn’t enough. You need a way of getting your remedy. Otherwise your employer could say “Yes, you should not have been unfairly dismissed, and I should pay you compensation – but what are you going to do about it?”

The answer, of course, is that you are going to go to an employment tribunal. But if you are to do so, the tribunal must have jurisdiction. That is to say, it must have the legal power to deal with your claim. That’s set out in s111 ERA, which tells us ‘A complaint may be presented to an employment tribunal against an employer by any person that he was unfairly dismissed by the employer.’ Without s111, the tribunal wouldn’t be able to hear any unfair dismissal claims. And because it says that unfair dismissal claims will be heard by the employment tribunal, they cannot be dealt with by another court. If you tried to bring an unfair dismissal claim in a County Court, it would be rejected, because the County Court does not have jurisdiction.

All this is important, because there are traps for the unwary. You must not assume that, just because you have a right, you are entitled to compensation in a particular way or that you will be able to bring a claim to the tribunal.

For example, the Working Time Regulations 1998 contain a right that you will not have to work more than 48 hours a week (unless you agree in writing to opt-out) and that night workers do not have to work more than eight hours at a time. But there is no entitlement to compensation if these rights are breached and you cannot bring a claim to the employment tribunal about them. They are enforced by the Health and Safety Executive, and various other Government agencies.

For each claim you bring to the tribunal you must have some idea of what compensation can be awarded, and where the tribunal’s jurisdiction comes from. Otherwise you may be caught out: at best, you’ll have have wasted your time, and at worst you may have missed the chance to bring your claim in the correct forum, or risk an order that you pay the other side’s costs.

This is one of the key questions you will want to know the answer to before you start employment tribunal proceedings; and having a reasonably realistic view of the value of your claim is essential if you are to negotiate sensibly, too.

The answer depends on the type of claim and a whole host of other specific circumstances, but it’s possible to give a few general pointers. In most cases, the idea will be to compensate you for what you’ve lost by reason of the unlawful conduct that forms the basis of your claim. There are exceptions, but they tend to involve fairly small sums. If your employment has ended, your main argument will be about lost earnings. If your claim is for discrimination, you will be making a claim for injury to feelings as well: most awards fall somewhere in the range £5,000 – £15,000, and awards over £25,000 are rare. If discrimination has caused significant injury to your health, you will be looking for an award for that, too: your starting point in assessing this is probably the Judicial Studies Board’s Guidelines for the Assessment of General Damages in Personal Injury Cases (9th ed, OUP £21.99)

In any case where you are claiming lost earnings because you have lost your job, you will be under a duty to ‘mitigate’ your loss. What that means is that just because you’ve been dismissed, however unfair (or discriminatory) the dismissal, you can’t expect to sit back and claim lost earnings for the rest of your career. You are expected to try to find another job. If there are good reasons why you can’t, or why any job you are likely to get will be for a much lower wage than you were earning before, you’ll need to be able to explain. (See ‘Mitigation‘) It is fairly rare that tribunals award compensation to cover more than a year or two’s lost earnings – and a few months is more usual. For the kinds of circumstances that might persuade them to look at a longer period, see ‘Push your luck,’ and ‘The mummy track.’

There’s a limit, currently £66,200, on what you can recover as compensation for most types of unfair dismissal – but most awards get nowhere near that limit. There’s no limit in theory to what you can get for discrimination or for a whistle-blowing dismissal, but that doesn’t mean that awards have to be huge. In 2006/2007 (2007/2008 figures are not yet available), the median award for unfair dismissal was £3,800; and the medians for race, sex and disability discrimination cases were about £7,000, £6,700 and £8,200 respectively.

In particular, don’t let newspaper reports of awards in the hundreds of thousands, or even milllions, give you the wrong idea. Tribunals do occasionally make very large awards – and those, of course, are the ones that hit the headlines – but they are rare. The best way of getting a huge award is to have an extremely well-paid job to start with: if you’re being paid in the hundreds of thousands every year, then you’ll clock up large losses in a short period out of work. People earning normal salaries will only get large awards if they can show that they are likely to suffer a very long period of future loss. That – because of the duty to mitigate – is usually difficult.

Quite often you will have a monthly figure, when you want a weekly one, or a weekly one when you want a monthly one.

Monthly to weekly

Multiply the monthly figure by 12. This gives you the yearly figure. Then divide by 52.

Weekly to monthly

Multiply the weekly figure by 52. This gives you the yearly figure. Then divide by 12.

Warning

This is a straight mathematical exercise. It assumes that the figure you have is representative. If it is not, your result will be misleading. Say for example, that you use a week where the claimant was paid an unusually large or small amount, your monthly figure will be correspondingly large or small.

It is a truth generally acknowledged that Her Majesty’s Revenue and Customs are evil. But nobody is totally evil. And even the Revenue has its good points.

One of these is that they provide some useful online help for calculating certain statutory payments. If you need to calculate:

• Statutory Adoption Pay
• Statutory Maternity Pay
• Statutory Paternity Pay
• Statutory Sick Pay

You can enter the relevant information on the Revenue website and it will do the hard sums for you.

Statutory payments calculators

All employment lawyers know that orders for reinstatement (getting your old job back) and re-engagement (getting another job with your former employer) are extremely rare. To some extent this has probably become self-fulfilling: everyone knows that these orders are rare, so hardly anyone bothers to apply for them. That is part of the reason they are so rare.

In fact, it is very often a good idea to try for re-employment (employment lawyers tend to use this term to cover reinstatement or re-engagement). There are two main reasons. The first is that it is something that, as a rule, employers really hate. They hate it so much that a credible application for re-employment will often have a marked upwards influence on offers of settlement.

The other reason is that if re-employment is ordered, the claimant is entitled to be compensated in full for all her lost earnings from dismissal to the date of re-employment: the statutory limit does not apply. Where losses to the date of the hearing exceed the statutory limit, therefore, an application for re-employment should always be vigorously pursued unless it is clear that it is hopeless.

Bear in mind that on an order for re-engagement, the tribunal has a wide discretion to order re-engagement on such terms as it considers just. So take the widespread assumption that re-employment is impossible if there has been any significant contributory fault with a large pinch of salt. Where there has been misconduct, for example, but not sufficient to justify dismissal, there is no reason why the tribunal should not order re-engagement to a lower-paid post, or with a disciplinary warning.

Do not rule out re-employment just because it is not practicable for the claimant actually to return to work, either: re-engagement with immediate medical retirement will sometimes be an option worth considering.

Where a case involves issues of unfair dismissal and redundancy payment confusion often develops around whether the claimant should be seeking a basic award or a redundancy payment. Since the awards are of equal value this is rarely a vital issue, but it is worth getting right if possible.

The following scenarios may assist, all assume that the claimant has not received any payment relating to dismissal.

• If the client has been made redundant and accepts the redundancy was fair, he should claim a redundancy payment.
• If the client has been dismissed, but does not accept the reason was redundancy, he should claim the basic award (but probably a redundancy payment in the alternative, in case the tribunal finds the dismissal was a fair redundancy.)
• If the client has been made redundant, but believes the dismissal was unfair, he can claim both the redundancy payment and the basic award. However, the rule against double recovery means he will only recover the value of a single award.¹
1. Double recovery is the rule that you can only be compensated once for the same loss, even if you are entitled to bring a claim under a number different jurisdictions.

Many employment cases involve disputes about calculations, often relating to sums of money, but also other issues, such as hours worked or weeks employed.

Normally the dispute is about what calculation needs to be made. For example, the claimant will say that he is entitled to 3% commission on his sales, while the respondent claims he is entitled to 2.4%.

Surprisingly often, however, the dispute comes down to a difference in the result of the calculation. For example, the parties agree that 3% commission is owed and that it is on the invoices to be found from page 70 to 77 in the bundle, but cannot agree a final figure. The claimant claims he is owed £3,544, while the respondent insists it is £2,898. The difference is purely arithmetical and it seems obvious that one party must have got its sums wrong.

In an ideal world, such errors would not occur and, if they did, would soon be resolved amicably. In this, less than ideal world, the question arises, should an advocate cross-examine a witness on his maths?

The authors believe not. While the maths may be a question of fact, it is not one that is likely to be illuminated by careful cross-examination. Instead, the sums should be set out in the submissions and the tribunal can, if necessary, do its own arithmetic to check them.

It should be noted, however that this is not necessary the general view and that the authors are aware of at least one tribunal who took the position that a witness should be taken through his calculations. The most sensible approach is to seek guidance from the tribunal, by saying something like “Sir, there is an issue regarding the calculation of this figures. It comes down to a question of arithmetic. Unless you think it would be helpful for me to take the witness through the sums in detail, I think it can be dealt with in submissions.”

The final point to note is that, in an appropriate case, the tribunal’s own arithmetic can be challenged by way of appeal, see Mears v Lloyd Green & Co. for an example. In most cases, however, a tribunal’s mistaken calculation is more appropriately dealt with by applying for a certification of correction or a review.