What is the Basic Award?
If you win your unfair dismissal case, the Employment Tribunal will give you compensation made up of a basic award and a compensatory award. This page tells you about the formula and provides direction on how to calculate the basic award.
The Basic Award is intended to compensate you for the loss of your job security and the fact that you will have to build up a fresh history of continuous employment after your dismissal. It is also intended to reward you for your past service to your Employer. The Basic Award is calculated on a formula in S119 and s220 – s229 ERA 1996. The formula is based on your age, length of service and weekly pay. It is the equivalent of a statutory redundancy payment, so if you have already received a statutory redundancy payment, and the reason for your dismissal was redundancy, then you are not entitled to the Basic Award.
The Basic Award can be reduced if the Employment Tribunal believes that your deserve it because of your behaviour, or where you have unreasonably refused your employers offer to reinstate you at work. In cases of unfair dismissal for reasons of trade union activities, health and safety, occupational scheme trusteeship or Employee representative activities, the Basic Award is calculated as described below, but subject to a minimum award. If your Basic Award comes to more than the minimum amount, you can claim the higher amount. If the Basic Award is lower, you get the minimum amount. This amount is reviewed every year.
How to calculate the Basic Award
The Basic Award is calculated by counting back in whole years from the last date of your employment. You can use the Statutory Redundancy Pay Calculator to work out your basic award. It multiplies an age factor by the number of years with your Employer, and one weeks gross pay up to the statutory maximum. The age factor is calculated as follows:
- Half a week’s pay for every year of employment when you were below the age of 22.
- One weeks pay for every year of employment when you were aged between 22-41.
- One and a half weeks pay for every year of employment when you were aged 41 or over.
The formula for calculating the Basic Award is;
(Age Factor) x (Your length of service with your Employer) x (One weeks gross pay up to the statutory maximum) = Basic Award
Last Updated: [22/02/2022]