Quite often schedules of loss will leave off figures for some types of damage and replace them with words like ‘in the tribunal’s discretion’ or ‘to be assessed’. The expectation is that the tribunal will fill in the blanks.

This is not a good idea.

Your submissions, including your schedule of loss, should ask the tribunal to do something. There should not be gaps, where the tribunal does not know what you are asking for.

This is partly a practical issue. Things will be easier for everyone involved if it is clear what the claimant is trying to achieve.

The other issue is one of advocacy. The schedule is an opportunity to persuade the tribunal and to set up other submissions.

Imagine a case in which a women unfairly dismissed a few months before starting maternity leave. She will want to claim for the loss of earnings flowing from the dismissal. The hearing takes place about a month after she gives birth. One approach would be to claim for loss up to the hearing, then leave future loss ‘at the discretion of the tribunal’.

A better approach, however, would be to set out exactly what the loss is likely to be. The Claimant may not yet be in a position to seek work. So set out when she will be able to start looking. She will probably have some difficulty in finding a job. The job market is unfriendly to new mothers and she will need to balance her search with her new childcare responsibilities. So she should claim for a considerable period of time to reflect this – probably at least six months. When she finds a new job it may well be on a lower salary. It will take time to work back to her old earnings. So she should claim for that period as well.

All of this will be contested by the respondent. He will say that the Claimant should start looking for work immediately and that she will probably find a new job, at her old salary, very quickly. The tribunal may agree, at least to some extent.

But setting out a position is more persuasive than leaving things entirely to the tribunal. It also gives you the opportunity to make more submissions. Once you say ‘at the discretion of the tribunal’ it is difficult to say much else. After all, you have said you are leaving it to them. If you say precisely what you want the tribunal to do, you can call evidence and make submissions to support your position.

In any trade ‘Use the right tool for the job’ is good advice. If you are writing a schedule of loss, the right tool is a spreadsheet program – probably Excel.

A spreadsheet presents you with a page of cells, in which you can enter numbers. It is designed for dealing with and presenting numerical information, in the same way that a word processor – eg Word – is designed for dealing with text. But Excel is much better designed than Word.

The main advantage of a spreadsheet is that you can get the software to do the calculation for you. Suppose you have calculated a weekly loss of £78.65, and the period of time between dismissal and the hearing is 57 weeks. You write 78.65 in one cell (say D7) and 57 in another (say D8). To get the total past loss, you need to multiply £78.65 by 57. At this point, you could reach for your calculator, do the calculation, and then write £4,483.05 into cell E9. But the clever thing is to tell cell E9 that it should do the sum: (number in cell D7)x(number in cell D8). You do this using Excel’s ‘formula builder’ function.

The reason this is so clever is that it allows you to change your mind about any of the numbers that go into your calculation without re-doing all the consequential calculations the hard way. Change the number in cell D7 or D8, and the number in E9 will change automatically. If you use ‘formula builder’ every time you do any calculation, by the time you have finished you will have a lot of automatic calculations built in to your schedule. Your ‘weekly loss’ will have played a part in past loss, and future loss; you will have added up various heads of loss; you may have calculated interest, or done a ‘grossing up’ calculation. Lots of these figures will depend on each other.

Download this sample schedule and play around with it to see how it works. Try changing the ‘Week’s Pay, Net’ figure. Most of the figures will change, because they depend on the weekly pay.

The more complicated a schedule of loss is, the more this helps. In a difficult case your schedule may go on for a dozen pages and include a hundred separate calculations. You won’t get it right first time – or even second or third – so there will be many changes. If you’re doing the sums manually, you’ll end up doing hundreds of separate recalculations, which will then have to be double and triple checked. You will spend a lot of quality time with your calculator; and even then, you’ll probably get tired and end up with some errors. You can make mistakes with a spreadsheet, too of course – if you tell ‘formula builder’ to subtract instead of adding, or add instead of multiplying, or if you fail to add all the figures you ought to, or add some figures twice. But the point is that they are easier to spot; and once spotted, easier to correct.

Your spreadsheet can help during the hearing, or during negotiations, too. If you are using a laptop, you can have your spreadsheet open, and adjust it on the fly. Say, for example, the tribunal finds that the Claimant’s weekly wage is £15.50 less than you were arguing for. You adjust one cell, then see exactly what the result of the change is. Or your opponent suggests that the tribunal is likely to take this approach and says you should therefore accept £6,000. You’ll be able to see immediately that this is bad argument, since such a reduction will only take the total claimed down to £7,211.05.

Learning to use a new tool always slows you down a bit while you do it, but if you are going to prepare a lot of schedules, this is an essential investment of your time. You’ll soon get the hang of it, and from that point on it will make your life much easier.

An important part of case preparation is drawing up a schedule of loss. This is a list of the money that you are claiming from your employer.

A schedule should be complete and optimistic, without being silly. It should include everything that, if things go very well indeed, the tribunal might award.

This means that most schedules ask for an amount much higher than you are actually likely to get.

It is important to keep this in mind. Firstly, because otherwise you are likely to be disappointed by what is actually a stunning victory. Secondly, because when negotiating you need to take account of the likely outcome much more than the schedule of loss.

A convenient mental short hand is hard and soft numbers. Hard numbers are those that are unlikely to change very much. Soft numbers are those that are likely to change a great deal. A hard schedule of loss is one where, if you win, you are likely to recover something close to the amount claimed. A soft schedule is one where, if you win you are likely to recover much less.

A hard schedule is not necessarily better than a soft one. A claim with a near certainty of getting £300 is not nearly so good as a soft claim for £50k. After all, even if you only recover 5% of the latter you will end up with £2,500.

But it will be very difficult to properly negotiate the claim for £50k, unless you recognise that the most likely outcome is about £10k.

Most schedules have some hard elements and some soft ones. It is normally worth going through point by point to assess how much the claim is likely to be worth.

Of course, the other important assessment is how likely you are to win in the first place. A hard schedule of £1,000 in a very weak case is very different to one in a very strong case.

If you are advising a claimant it is important to make sure that your client understands what the schedule of loss means in real terms. Otherwise, you are setting them up for disappointment and hindering their ability to make sensible decisions in settlement.

Schedules of loss normally divide the compensatory award for unfair dismissal into past loss (loss up to the hearing) and future loss (loss that will happen after the hearing). A very similar approach is also taken to equivalent loss in other types of cases

This is a sensible system, because the tribunal will have to think about these things differently. Past loss is about what has actually happened. The tribunal will focus on making findings of fact about the claimant’s earnings post-dismissal and his efforts to mitigate. Future loss, however, is about predicting what will happen next.

There is no rule, however, that these are the only two categories that you can use. Often more subcategories are extremely useful.

Events

Sometimes a claimant’s loss remains constant. For example, a woman who losses a job that paid £200 per week and remains unemployed up to the hearing has a past loss of £200 multiplied by the number of weeks between dismissal and the hearing.

On the other hand, she might have had done some temporary work for a few weeks shortly after dismissal where she earned £100 per week. Then got some part-time work earning £150 per week. Then a period of unemployment, followed by securing a permanent job on £185 per week.

In the second example trying to group all the past loss under one heading is likely to be difficult. A better approach is to divide it as follows:

• Unemployment: 2 weeks @ £200 = £400
• Temporary work: 3 weeks @ £100 = £300
• Part-time work: 6 weeks @ £50 = £300
• Unemployment: 6 weeks @ £200 = £1,200
• Permanent work: 16 weeks @ £15 = £240

This will make it much easier for everyone to understand what loss you are claiming and why.

A schedule of loss should, up to a point, tell a story. It should be possible to understand what has happened to a claimant, and what he says will happen in the future, by reading it.

Types of loss

Most claims for compensation are primarily based on lost wages. But there are often other types of loss: bonuses, gym membership, lunch vouchers, car allowances, unsociable hours payments, subsidised travel, etc.

Often there will be dispute about whether all the types of loss are recoverable or how much they are worth. In such cases it is normally useful to divide them up, rather than deal with a single lump figure.

This has two advantages, firstly, as with dividing by events, it makes your schedule easier to understand.

Secondly, it makes it easier to for the tribunal to make changes to the figures. This will normally happen to a greater or lessor extent. Either the tribunal will decide that certain loss is not recoverable or that it should be calculated differently. It is much easier to make such changes if the figures are split up sensibly.

Most awards of compensation made by the employment tribunals are of fairly modest amounts that are unlikely attract any tax: the sum of money that the tribunal orders the employer to pay is the sum of money the claimant ends up with.

However, awards can attract tax at up to 40% and, in some cases, can also be subject to national insurance. In such cases, it is necessary to take the effect of tax into account in calculating the schedule of loss; this is the calculation known as ‘grossing up.‘

If you are the claimant and you have done this calculation, you will probably remember when you get the tribunal’s judgment that the sum awarded is larger than it would otherwise be because you are going to have to pay a substantial amount of tax. But if you are an adviser acting for a client, don’t assume that they have understood the grossing up calculation or remembered what you told them about tax on any award the tribunal might make. At least on first sight, they are likely to read the judgment saying that their former employer has to pay them £X, and think that that means they are going to end up with £X. It will then come as a let-down when they realise that what they’re actually going to get is £Y, substantially less than £X, because quite a lot of it is going to have to be paid to HMRC.

So when you contact your client to tell them the result of the case, tell them the news in the right order. That is to say, don’t tell them:

‘The tribunal has awarded you £X in compensation.

Instead, make sure you have done the tax calculation before getting in touch, so that you are in a position to say something like:

‘The tribunal has awarded you a sum of money that will leave you about £Y after tax.’

That way, by the time they see the judgment telling their employer to pay then £X, they will know what it means in terms of the money they will actually get.

There’s quite a common belief that employment tribunals don’t award compensation for future loss beyond 3 or 6 months.

Other things being equal, this isn’t a bad rule of thumb. If there’s no good reason to suppose that you are going to have particular difficulty getting another job, or that even if you get another job it will be at a much lower salary than your old job, but you haven’t in fact got another job by the time of the hearing, the tribunal hasn’t got very much to go on. And that is precisely where a rule of thumb comes in handy: it helps you out when you don’t know what to do.

But the other things being equal bit is important. Sometimes other things are not at all equal. If you really do think that there is some reason why you are at a serious disadvantage in the labour market, and your career is not likely to be back on its old track for years if ever, then tell the tribunal all about it and ask for compensation for the whole of your loss.

You will be much better placed to make good a claim of this nature if you have found another job by the time of the hearing. This is because that fact in itself is a powerful piece of evidence about your strength in the labour market and your likely future earnings. Where a claimant has not yet got another job at the time of the hearing, tribunals often assume – perhaps unrealistically – that when they do get another job, they will match their old earnings so their loss will cease at that point. So they make a guess as to how long that will be – and the guess often is 3 or 6 months – and award lost earnings for that period only.

If on the other hand you’ve got another job on significantly less pay at the time of the hearing, the tribunal has much more information to go on. The fact that you have accepted a lower-paid job is a pretty convincing demonstration that you can’t do better at the moment: certainly the tribunal will take a lot of convincing that you’ve deliberately taken a badly paid job in order to inflate your claim.

You can also make more confident and better-founded predictions about the future once you have found another job. You may be in a position to say, for example, that you intend to stay in this job for at least 2 years because you don’t want a fragmented CV; or that although this job isn’t very well paid at the moment, it is sensible for you to stay in it because it is with a large and copper-bottomed employer and you think your chances of promotion in between 3 and 5 years are good; or that you have been lucky to get a job with hours that make it possible for you to take a part-time college course to retrain for a change of career that will allow you to earn better in future – but not for another 5 years.

If you have plans or expectations of this sort, don’t limit yourself to claiming a few months’ future loss. It is important to be realistic, of course, so don’t – either – make wild claims that you can’t support with evidence.

Maths teachers, much to the frustration of their students, always say to ’show your working’. They mean that it is not enough to get the right answer, you should also show how you reached it.

This is good advice in legal practice as well. Unless they are obvious, conclusions are not convincing. It is the route you take to the conclusion that will persuade others.

Even more than that, it is often hard to remember in detail how you reached a particular conclusion some time later. This is particularly true if, like most tribunal hearings, there are lots of different issues to deal with.

It is particularly important when dealing with schedules of loss. Unless you write things down at the time, it is almost impossible to remember why a particular number is what it is. And raw numbers are not intuitive. Nobody will be able to look at a final figure, say £16,540, and understand immediately where it comes from. For every figure of compensation claimed, you should set out how it was reached.

If you are claiming compensation for lost earnings, basic award, pension or other contractual payments, your claim is for your net losses: you are entitled to be awarded what you have actually lost by reason of your employer’s default. However, if your award for losses of this kind totals more than £30,000, you will be taxed on the excess over £30,000 at the rate of 40%. That means that if you simply claim your net losses, you will end up significantly out of pocket.

In these circumstances you need to do a calculation commonly referred to as ‘grossing up’ to arrive at the figure you need to claim so that, after tax, you will be left with a sum that properly compensates you for your net losses.

This calculation is a little daunting at first sight, but if you keep calm it is not really difficult.

You can approach it in one of two ways: you can either understand the calculation properly, or you can follow a formula and not worry too much about understanding why the formula gets you the result you are after. Obviously it is better to understand all your calculations, but if you are short of time and algebra makes you feel sick and panicky, you can get away with the short cut..

The full explanation

Round figures make sums easier, so suppose your net claim for lost earnings etc. is exactly £130,000. If you don’t gross up, you will lose 40% of the excess of this over £30,000 – that is, 40% of £100,000 which is of course £40,000. So you will end up with only £90,000 to compensate you for a net loss of £130,00.

To head this off, you need to claim a sum which, after tax at 40% on the excess over £30,000 will leave you with £130,000. We don’t know what this sum is at the moment, so we will call it X. We want to find out the value of X.

A good start is to write down what we do know about X:

X minus 40% of the amount by which X exceeds £30,000 is £130,000

or to put it another way:

X – 40/100 x (X-£30,000) = £130,000

If you remember a bit about how to manipulate equations from school, you can see at a glance that you are going to be able to find out from this what X is. The key is to remember that the left hand side equals the right hand side: that is what an equation is. So anything you do to one side, you must do to the other side as well. (Think of twins balanced on a see-saw if it helps. Give one twin a 5kg bag of apples to hold, and you have to give the other twin 5Kg of something to hold too. Move one twin 1m closer to the centre, and you’ll have to move the other one 1m towards the centre.)

Start by multiplying out the bracket:

X – 40X/100 + (40/100 x £30,000) = £130,000

so X – 40X/100 + 12,000 = £130,000

then subtract 12,000 from each side:

X-40X/100 = 118,000

then cancel the fraction:

X – 2X/5 = 118,000

then notice that X – 2X/5 is the same thing as X – 2/5ths of X, which is 3/5ths of X

so

3X/5 = 118,000

multiply each side by 5:

3X = 118,000 x 5

divide each side by 3:

X = 118,000 x 5/3

so:

X = 196,66.67

So you need to claim £196,66.67 to compensate you properly for a loss of £130,000.

It is easy to make a slip in this kind of calculation, so always try the calculation in reverse to make sure you have done it right.

If you are awarded £196,66.67 by the tribunal, you will be taxed at 40% on the excess over £30,000, that is on £166,66.67 of it. So to check we have done the calculation right, we need to take 40% off £166,66.67 and then add back the first £30,000.

40% of £166,66.67 is £66,666.67

So taking off 40% we have £166,66.67-£6,666.67 = £100,000

and adding back the £30,000 we get £130,000, which we are pleased to note is the number we first thought of.

The short cut

If your net loss is £A, you need to claim:

5 x (A – 12,000)/3

in order to be awarded a sum that will leave you with £A after tax.

Or if you prefer words: subtract £12,000 from your net loss, multiply the result by 5 and divide it by 3 and the result will be the sum you need to claim.

Remember that you should only apply this formula to net losses (of earnings, the value of contractual benefits etc – not including personal injury, injury to feelings or aggravated damages) where the total exceeds £30,000.