Question of the Month – How Are Unfair Dismissal Awards Calculated?
Under the Unfair Dismissal Act 1977 – 2015, the maximum compensation that a Tribunal can award is two years remuneration. The calculation of the award is based on the financial loss incurred by the claimant.
Financial loss is defined under employment legislation as “any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal”.
Where a complainant has not secured other employment by the time of the hearing, a tribunal will take into consideration a number of factors when calculating financial loss:
- What effort, or lack of effort, has been made to seek other employment.
- Consider if the employee is available for work i.e. is the claimant claiming disability allowance from the Department of Social Protection and unavailable for work.
If the claimant was successful in obtaining a new position, but the new position’s rate of pay was lower than the rate of pay they received when in employment with the respondent, the difference in the pay will be taken into consideration.
Since the implementation of the Workplace Relation Reform in October 2015, cases are being heard by the Workplace Relations Commission, on average, within three months of dismissal. As claims are being heard quicker, the financial loss incurred by the complainant will be lower. The WRC have been taking into consideration future losses up to the maximum of two years remuneration.
In circumstances where no financial loss has been suffered, the maximum compensation for an Unfair Dismissal award is four weeks remuneration.
If you have any questions regarding unfair dismissal legislation of calculating unfair dismissal awards please contact the advice line.Back to the blog
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