Employment Tribunal financial awards

[uknick]

Apologies if I am over complicating the situation, but after my 3 year struggle I want to make sure following is done correctly as there is no going back for more if I get it wrong.

My extremely long and tortuous ordeal is nearly at the end. ET have finally ruled on my case and decided I was unfairly and wrongfully dismissed. I now need to agree a settlement or go to a remedy hearing.

My solicitor considers the ruling as written should not allow for contributory fault and Polkey deductions. They also say that, due to the time I’ve been out of work, there is a good chance I may get awarded the maximum statutory amount as my lost salary costs over the time since dismissal far exceed the maximum award. Therefore, I should ask the respondent to settle before remedy for the maximum statutory award.

However, I am a little confused as to how much the maximum award can be.

From what I read the award can be made up of a basic award, a compensatory award and possibly a breach of contract award. This last one is possible in my case as the judge ruled I was wrongfully as well as unfairly dismissed.

But, this is where I get confused. My solicitor says the maximum I may get from the judge is circa £65k. But, from what I’ve read this is the limit on the compensatory award at the time when I was dismissed in 2010. Do I also get the basic award element and anything awarded for breach of contract in addition to that? Or, is £65k the absolute maximum that can be awarded, made up of all three?

How does income tax fit into the equation? For arguments sake let’s say I agree an amount of £65k in settlement, assuming this is what the judge would award. I know the first £30k can be tax free. But, how is the remaining £35k accounted for? For simplicity, let’s say the tax due on this is about £10k.

Do I ask for the award to be grossed up so I actually receive £75k and then I pay the HMRC the £10k?

Or, do I get the agreed amount of £65k and my ex-employer pay HMRC the tax, so the total cost to my ex-employer is still £75k?

Or, do I get an award of £65k gross and have £10k deducted at source by the ex-employer so I end up with a final award of £55k?

My solicitor indicates it will be the last of these three options, but I have read I should ask for the amount to be grossed up with the ex-employer picking up the tax bill.

[elanfan]

Have you been receiving benefits in the interim? I don't know but I'd have thought you may have to repay some of that too???

[edc]

Don't take this the wrong way but I have been involved in this sort of thing from the employer side on a few occasions but you are surely going to get the best advice from your solicitor/barrister. S/he knows the case better than anyone, has been dealing with the panel and employers representatives on a number of occasions and can weigh up your chances of success for all those options better than anyone here with the info above.

[Siscar]

It is hard to comment because there are a lot of factors. But, yes, tax may be payable of its over £30k, benefits may be recouped as well.

From an employer perspective it's slightly tricky to understand why they would settle for the maximum other than to avoid the cost of going to the remedy hearing, but they might.

I'd listen to your legal team, they are going to have a better take in this.

[gjf764]

Your legal team and/or PM Breadvan72 on here. He may pick up on this thread and help.

[edc]

Here are a few link to help you out:

http://www.mayowynnebaxter.co.uk/blog/guide-to-unf...
http://www.xperthr.co.uk/quick-reference/maximum-u...

[Jasandjules]

1. Did you not serve a Schedule of Loss?
2. That SoL should have what you are claiming net of tax, with a note that tax should be added by the Tribunal.
3. The max I take it your solicitor is referring to is the Cap on the award as you did not win any discrimination or whistleblowing?

[uknick]

edc said:

Here are a few link to help you out:

http://www.mayowynnebaxter.co.uk/blog/guide-to-unf...
http://www.xperthr.co.uk/quick-reference/maximum-u...

Thanks for the links ecd. This is the sort of thing I had found which indicates to me the maximum award possible is the total of basic, compensatory and any breach of contract. Which is why, when my solicitor said I could only get up to the compensatory award, I questioned it.

JasonandJules, an original SOL was submitted ages ago. But, it needs amending due to the final ruling. The current SOL far exceeds any possible award as it was compiled based upon a possible discrimination ruling. But, a revised SOL will also exceed the award maximum by some distance. Hence my question as to how tax is dealt with.

The ruling from the judge says I did nothing to warrant dismissal and also infers I was dismissed because I upset somebody high up in the company.

On another point, the ruling itself seems to ignore significant amounts of evidence heard at Tribunal. In particular evidence given under cross examination by the respondent’s witnesses which clearly contradicted their witness statements. In some cases the witnesses had to admit they made significant mis-statements during my dismissal process. Is it normal for the judge to leave this out if he finds in my favour?

[Zeeky]

Unfortunately you cannot gross-up for tax over the statutory limit. That means that not only do you not get anything over the limit, you will be taxed on anything below the limit and above the £30k threshold. You only have one £30k allowance for the total of the awards, not each.

It is quite common for contradictions to be left out of a judgment. It's even possible for the judgement to claim there were no contradictions even though there were. It's only relevant if it makes a difference to the decision.

Edited by Zeeky on Sunday 8th September 19:44

[anonymous-user]

Ask your solicitor.

[uknick]

I have asked my solicitor. They tell me the most I can get awarded at Remedy is £65k and any amount over £30k will be taxed, so I will end up with less than £65k at the end of the day.

It was when I looked at links such as ecd sent I saw a contradiction to this, i.e. judges can gross up to take into the tax.

Hence, my original question regarding awards, just to make sure I was getting correct advice.

[Zeeky]

As above, you cannot gross-up over the 65k to bring the net payment within the statutory limit. Unfortunately, that is how the cap works. Each type of award has its own cap though so you should start with a higher amount than 65k before tax.

[uknick]

Thanks Zeeky. That is what I thought with regard to awards, no doubt my solicitor meant the compensatory award cap when they quoted the figure of £65k. But no harm in getting a second opinion.

[anonymous-user]

The unfair dismissal compensatory award must be grossed up before the statutory limit is applied. The Tribunal cannot award more than the limit.

See also

https://www.google.co.uk/url?sa=t&rct=j&q=...

[uknick]

Thanks BV.