Employment Tribunal Compensation Estimator

The Employment Tribunal Compensation Estimator is a free online tool designed to help UK employees and HR professionals estimate potential compensation awards for workplace claims. Whether you’re dealing with unfair dismissal, discrimination, redundancy-related claims, whistleblowing, or breach of contract, this estimator gives a clearer picture of what a Tribunal might award in your case. It helps you understand the range of possible outcomes and set realistic expectations about compensation, rather than relying on sensational news stories of unusually high payouts. In essence, it functions as an unfair dismissal compensation calculator and a general employment tribunal award calculator under UK law – covering all claim types and showing how awards are calculated.

If you’ve been unfairly dismissed or subjected to workplace discrimination, this tool helps break down the different heads of claim (for example, your basic award, compensatory award, and any injury to feelings award) to provide an approximate compensation figure. It’s designed for everyone from long-serving executives to junior employees – and even HR professionals assessing risk – to quickly gauge what a Tribunal might award in a given scenario. By inputting key details (like salary, length of service, and details of the claim), the estimator shows how employment tribunal compensation is calculated and what factors might increase or decrease the value. This insight empowers you to make informed decisions, whether you’re negotiating a settlement or preparing for a Tribunal. Keep in mind that every case is different, but the estimator gives a useful starting point for understanding your claim’s potential employment compensation value in the UK.

In the sections below, we explain what compensation a Tribunal can award, the different components of an award, how compensation is calculated, time limits for claims, factors that affect payout amounts, and how Tribunal awards differ from negotiated settlements. We also answer frequently asked questions – like “Is there a cap on unfair dismissal compensation?” and “How is injury to feelings calculated?” – to help you navigate this complex area. Finally, we provide a clear call-to-action if you’d like personalized legal support or to try the estimator for yourself.

What Compensation Can an Employment Tribunal Award?

An Employment Tribunal can award financial compensation for a variety of losses if you win your claim. The exact types of compensation depend on the type of claim you bring. In an unfair dismissal case, for example, the tribunal can award a sum of money (made up of a basic award and compensatory award – explained below) and, in rare cases, order your reinstatement or re-engagement in your old job. For discrimination or whistleblowing claims, tribunals can award compensation for financial losses and non-financial losses (such as injury to feelings) with no fixed upper limit.

It’s important to note that Tribunal awards are compensatory, not punitive – the goal is to put you in the financial position you would have been in had the unlawful treatment not occurred. This means they can cover things like lost wages, lost benefits, and emotional distress caused by discrimination, but not things like simple inconvenience or an apology (tribunals can’t order an apology or reference from your employer). Tribunals also cannot award “injury to feelings” damages in ordinary unfair dismissal cases – that kind of award is only available in discrimination or certain whistleblowing claims.

Different claims lead to different types of awards. For example:

• In an unfair dismissal claim, compensation typically has two parts: a Basic Award (like statutory redundancy pay) and a Compensatory Award (for your actual financial losses).
• In a discrimination claim, compensation is uncapped and can include financial losses (past and future) and injury to feelings for the hurt and distress caused.
• In a redundancy claim (if your employer didn’t pay your statutory redundancy pay), the Tribunal can order the statutory redundancy payment you’re owed. Redundancy-related claims can also lead to a “protective award” (up to 90 days’ pay) if your employer failed to consult employees in a large redundancy situation.
• In whistleblowing or health and safety dismissal claims, compensation for loss of earnings is uncapped (not limited by the usual unfair dismissal cap).
• In a breach of contract (wrongful dismissal) claim, the Tribunal can award damages up to £25,000 for lost notice pay or other owed amounts (larger contract claims would have to go to a civil court).

Other things a Tribunal can award include modest sums for loss of statutory rights (usually a few hundred pounds) to reflect that a dismissed employee loses their legal protection and must build up two years’ service at a new job. In some cases, limited fixed awards apply – for example, if your employer refused to give you a written contract or payslip, a small fixed penalty can be awarded. But generally, the bulk of Tribunal compensation falls under the main heads of claim discussed next.

Heads of Claim in Tribunal Awards

When estimating your Employment Tribunal compensation, it’s helpful to understand the “heads of claim” – the categories of losses or damages that make up a total award. Different claims will include different heads, but the key ones are:

Basic Award (Unfair Dismissal)

The Basic Award is a fixed sum awarded in unfair dismissal cases (and some redundancy-related cases). It’s calculated similarly to statutory redundancy pay. The formula takes into account your age, your length of continuous service, and your weekly pay (gross pay before tax). Essentially, for each full year you worked for your employer, you get: – 1.5 weeks’ pay for each year of service aged 41 or over, – 1 week’s pay for each year of service aged 22 to 40, – 0.5 weeks’ pay for each year of service aged 21 or under.

However, there is a cap on the weekly pay that can be used in this calculation. For dismissals occurring on or after 6 April 2025, the maximum weekly pay for the basic award is £719. (For dismissals between April 2024 and April 2025 it was £700, and it’s adjusted annually for inflation.) This means even if you earned, say, £1,000 per week, the calculation will only count up to £719 per week for each year of service. There’s also an overall cap of 20 years of service that can be counted.

The Basic Award is essentially the same as the statutory redundancy payment – if you’ve received a redundancy payment for the same dismissal, the basic award may not be in addition to it (to avoid double-compensation). In some cases, a minimum basic award applies (for example, if you were dismissed for trade union activities or certain health and safety reasons, the law specifies a minimum basic award, often around £6,000).

Compensatory Award (Unfair Dismissal)

The Compensatory Award is the second part of an unfair dismissal compensation and usually the larger portion. It aims to compensate you for actual financial losses caused by losing your job. This can include: – Lost earnings from the dismissal date until you find a new job (including wages, bonus, overtime, etc.) – Lost benefits like pension contributions, health insurance, company car or any perk you lost because of the dismissal. – Future loss of earnings if you are still out of work or had to take a lower-paying job, the tribunal may project how long the income loss will continue (though tribunals rarely award more than 12 months of future loss in unfair dismissal cases as a guideline). – Loss of statutory rights – as mentioned, a small fixed sum (typically £300–£500) because you have to re-accumulate two years’ service at a new employer to regain unfair dismissal protection. – Expenses or job hunt costs – e.g. recruitment agency fees, retraining costs, if these were a direct result of your dismissal (tribunals may include these if reasonable).

Importantly, the compensatory award is subject to a statutory cap in ordinary unfair dismissal cases. As of April 2025, the maximum compensatory award is £118,000 (specifically £118,223) or one year’s gross pay, whichever is lower. (This cap typically increases every April – for example, it was ~£115,000 for 2024, £105,707 in 2023.) So if someone earns £30,000 a year, the cap for them would be one year’s pay (£30,000, which is lower than the overall cap). If someone earns £150,000 a year, the cap for them would be the statutory figure (~£118k) because one year of their pay exceeds the cap.

There are exceptions where no cap applies: If your dismissal was for a reason that’s automatically unfair and excluded from the cap (such as whistleblowing or health and safety-related dismissal), the compensatory award can exceed these limits. Also, discrimination claims have no cap (see below). But for a normal unfair dismissal, the cap is the absolute maximum – even if, for example, you lost earnings of £200,000, you could only get up to the cap.

The tribunal will calculate your actual loss up to the hearing (and sometimes some future loss), then subtract any income you earned from new employment in that period (since you must mitigate your loss by seeking another job). If you found a new job quickly, your loss will be much smaller (maybe just a few weeks’ pay); if it took you a year to find work, it will be larger – up to the cap. Note also the tribunal can reduce the compensatory award for several reasons (explained under “Factors Affecting Compensation” below), such as if you failed to try to find new work or if you did something to contribute to your dismissal.

Injury to Feelings (Discrimination & Harassment)

In cases of unlawful discrimination, harassment, or certain whistleblowing detriment claims, tribunals can award compensation for injury to feelings. This is a non-economic award for the hurt, humiliation, anxiety or distress you suffered due to your employer’s actions. It is separate from any financial losses. Even if you had no financial loss (for example, you were discriminated against but kept your job), you could still receive an injury to feelings award for the emotional impact.

Injury to feelings compensation is not calculated like a precise formula; instead, tribunals rely on guideline ranges known as the Vento bands (named after a landmark case). These bands are periodically updated for inflation. For claims started on or after 6 April 2025, the Vento bands are roughly: – Lower band: £1,200 to £12,100 – for less serious cases (e.g. one-off or isolated incidents of discrimination). – Middle band: £12,100 to £36,400 – for serious cases that don’t merit the highest band (e.g. a pattern of discriminatory treatment). – Upper band: £36,400 to £60,700 – for the most severe cases (e.g. a lengthy campaign of harassment or especially egregious discrimination). Only in very exceptional cases do awards exceed the upper band.

The tribunal will consider factors like how many incidents occurred, over how long, and how the treatment affected you when deciding the injury to feelings amount. For example, a single insensitive remark might fall in the lower band, while months of sustained bullying or a discriminatory firing might fall in the upper band. It’s also worth noting that these awards are not tied to your salary (a high earner and a low earner could receive similar injury to feelings amounts for similar distress, since it’s about emotional impact, not financial loss).

In discrimination cases, aggravated damages can sometimes be awarded on top of injury to feelings – but only if the employer behaved in an especially malicious or oppressive way that aggravated the hurt (these are relatively rare). Also, if the discrimination caused you actual ill health (like a diagnosed depression or other psychiatric injury), the tribunal can award personal injury damages for that, which would be assessed separately (often requiring medical evidence). Interest can also be applied to injury to feelings and other awards, usually from the date of the discrimination to the date of the hearing.

Other Compensation Heads

Depending on your case, there may be other specific heads of compensation, such as:

• Wrongful Dismissal (Breach of Contract): If your employer breached your contract (for example, by not giving you notice pay), you can claim those lost contractual amounts. The tribunal’s jurisdiction for breach of contract claims is limited to £25,000 Any higher claims would need to go to court.
• “Protective Award”: If you were made redundant as part of a large group redundancy and your employer failed to consult employee representatives as required, a tribunal can award up to 90 days’ pay per affected employee as a protective award.
• Failure to Provide Written Statement: If your employer didn’t give you a written statement of employment particulars and you win certain other claims, the tribunal may award a fixed sum (often 2 or 4 weeks’ pay capped at the statutory weekly limit).
• ACAS Conciliated Settlement (COT3) Breach: If your employer reneged on a settlement reached via ACAS, a tribunal can award the unpaid settlement amount.

Most of these are less common or smaller elements compared to the major ones (basic, compensatory, injury to feelings). The Employment Tribunal Compensation Estimator primarily focuses on the main heads of loss – giving you an estimate of the basic award (if applicable), compensatory award, and injury to feelings based on the information you input.

How Compensation is Calculated

Each head of claim has its own method of calculation. Understanding how tribunals calculate awards will help you use the estimator effectively and interpret its results:

• Basic Award Calculation: As mentioned, the basic award uses a formula based on age, length of service, and weekly pay. You don’t need to calculate this manually – the Estimator (and the government’s redundancy pay calculator) will do it – but roughly, it’s years of service × applicable weekly multiplier. For example, suppose a 50-year-old employee was unfairly dismissed after 10 years’ service with a gross weekly pay of £500. Their basic award would be: 6 years (over 41) × 1.5 weeks × £500 + 4 years (ages 22–40) × 1 week × £500 = £4,500 + £2,000 = £6,500. If that person’s weekly pay was above the cap (say £800), the calculation would use the cap (e.g. £719) as the weekly pay. The Estimator uses the current statutory weekly pay cap in its calculation. Keep in mind the basic award can be reduced in certain cases – for example, if you already received a redundancy payment for that dismissal, or if you refused an offer of reinstatement unreasonably, the tribunal might reduce or even eliminate the basic award.
• Compensatory Award Calculation: The compensatory award is calculated by examining your actual losses due to the dismissal. This means adding up:

• Lost net earnings from the dismissal date to the hearing date (or until you found another job). For instance, if you were out of work for 6 months and would have earned £3,000 per month, that’s £18,000 lost earnings.
• Loss of benefits (company car allowance, bonus you reasonably expected, pension contributions your employer would have made, etc.) over that period.
• Future losses if you are still unemployed or took a pay cut in a new job – tribunals may project a reasonable period into the future for continued loss (often a few months up to one year, rarely more).
• Minus any income you earned in a new job during the period (or could have earned, if the tribunal thinks you unreasonably failed to take a job).

The tribunal’s task is to arrive at an amount that is “just and equitable” in all the circumstances. They expect you to mitigate your loss, meaning you should make reasonable efforts to find a new job as soon as possible. If you don’t, the tribunal might conclude that your losses are partly your own responsibility and reduce the award accordingly (for example, if they believe you could have found a job after 3 months but you didn’t try, they might only award 3 months’ loss instead of 6).

Additionally, certain deductions might be made: – If the tribunal believes you would have been dismissed anyway even if proper procedure was followed (a concept known as the Polkey deduction), they may reduce the compensation, sometimes significantly (even to zero in extreme cases). – If you are partly to blame for your dismissal (e.g. misconduct), the tribunal can reduce the award for contributory fault – for instance, a 25% reduction if they decide you were partly at fault. – If you received any termination payments from your employer (like pay in lieu of notice, or an ex gratia sum), those would generally be offset against the compensatory award to avoid double recovery.

The compensatory award for unfair dismissal cannot exceed the statutory cap (one year’s pay or ~£118k, as discussed) in normal cases. The Estimator will apply the relevant cap based on the scenario you select. Remember, for automatically unfair reasons that are uncapped (whistleblowing, etc.), the cap is lifted – the tool will account for that if you indicate such a reason.

• Injury to Feelings Calculation: While not a mathematical formula, injury to feelings awards are determined by placing your case in one of the Vento bands (lower, middle, upper) described earlier. The Estimator may ask you to rate the severity of the discrimination or harassment (for example, “Was it a one-off incident or a prolonged campaign?”) to suggest a likely band. For example, a single discriminatory comment might yield an award in the low thousands of pounds, whereas a long period of harassment or a particularly egregious act (like a discriminatory dismissal) could yield tens of thousands. The tool uses the latest Vento band ranges (adjusted to current year) as a guide for the injury to feelings component. Ultimately, the exact figure is at the tribunal’s discretion, but the bands give a framework. If multiple types of discrimination occurred, the tribunal still gives one combined injury to feelings award (they won’t award separately per ground, to avoid double counting).
• Other heads: If relevant, the Estimator can also factor in other compensation elements such as notice pay owed (if you weren’t paid notice and you’re claiming it as wrongful dismissal) or statutory redundancy pay due. These are calculated using straightforward methods (notice pay = the pay you would have earned during your notice period, statutory redundancy = same formula as basic award). The tool will prompt you for necessary details in those cases.

It’s worth noting that Tribunal compensation is compensatory, not punitive. With very few exceptions, you won’t get extra money just to punish the employer. The amount is grounded in your loss. This is why two people with the same claim might get different awards – e.g. if one found a new job quickly and the other did not, their compensatory awards will differ greatly. Also, tribunals generally require evidence for the losses – claimants often prepare a “schedule of loss” detailing how figures are arrived at, and you should be prepared to back up your claims (the Estimator’s output can help you formulate this, but actual evidence will be needed in a real case).

Finally, be aware of tax implications: some components of a Tribunal award (like unpaid wages or notice pay) are taxable as normal income, whereas others (like injury to feelings for discrimination, or the first £30,000 of a purely compensatory severance payment) may be tax-free. The Estimator’s figures are gross amounts before tax. You might want to consult an advisor on what tax you’d actually take home – but generally, compensation for lost earnings is taxed similarly to earnings, while compensation for injury to feelings or personal injury is not taxable in the UK.

Time Limits for Claims

Before you can even claim compensation, you must file your Employment Tribunal claim within the strict time limits. In most cases, the deadline is 3 months minus 1 day from the date of the event you’re complaining about. For example, if you were dismissed on 1 July, your claim for unfair dismissal must be filed by 30 September (3 months less a day) at 11:59pm. Similarly, if you experienced discrimination on 1 July, the claim should be in by 30 September.

Some types of claims have a 6-month minus 1 day deadline – notably claims for statutory redundancy pay or equal pay. (For instance, if you’re claiming your employer didn’t pay your redundancy money, you have 6 months to bring that claim.) Also, claims related to certain industrial actions or armed forces have extended limits, but those are less common.

One crucial step is ACAS Early Conciliation: Before you can submit a Tribunal claim, you’re required to contact ACAS and go through the early conciliation process (or at least notify ACAS of your intent to claim). Starting early conciliation pauses the clock on your tribunal deadline for up to about 6 extra weeks. You’ll receive an ACAS conciliation certificate number which you need to put on your claim form. The Estimator will remind you about these time limits, but it’s not a substitute for legal advice on limitation dates. If you miss the deadline, tribunals rarely allow late claims – they only extend time in exceptional circumstances (for unfair dismissal, only if it was not “reasonably practicable” to present in time; for discrimination, if the tribunal thinks it’s “just and equitable” to allow it, which is a high bar). So, do not delay in starting your claim, even if settlement talks are ongoing.

Here’s a quick summary of time limits: – Unfair dismissal & discrimination: 3 months (minus one day) from the effective date of termination or last act of discrimination. – Constructive dismissal: 3 months (minus one day) from the date you resigned (since that’s treated as the dismissal date). – Redundancy pay or Equal pay claims: 6 months (minus one day) from when employment ended or the equal pay breach. – Breach of contract (tribunal): 3 months from termination (tribunals only hear employee breach claims if you’ve left the job). – Whistleblowing detriment (if still employed): 3 months from the detrimental act.

Always mark your calendar and initiate ACAS conciliation within these times. Starting a claim can be complex if incidents are ongoing or there are multiple events (like a series of harassing acts). In such cases, time may run from the last in a series of incidents. When in doubt, get advice – but err on the side of caution and assume the clock is ticking from the first incident, to be safe. The Estimator provides information on time limits because it’s a common question (“Am I still in time to claim?”), but it cannot give case-specific advice on extensions or exceptions.

Factors That Affect How Much You Can Claim

Not every case with the same starting salary and loss period will end up with the same compensation. Tribunals adjust awards based on various mitigating or aggravating factors. Here are key factors that can affect your compensation amount:

• Statutory Caps and Limits: As discussed, if your claim is for ordinary unfair dismissal, the compensatory award is capped (currently at ~£118k). Your basic award and redundancy pay also use a capped weekly pay figure. No matter how deserving you feel you are, the tribunal cannot legally award above these limits (except in uncapped claims like discrimination or whistleblowing). On the flip side, discrimination and whistleblowing claims are uncapped – compensation can be much higher if your losses are high. This difference in caps often affects an employee’s strategy (for example, if you have both an unfair dismissal and a discrimination claim from the same facts, the discrimination claim allows full recovery of losses without the unfair dismissal cap).
• Mitigation of Loss: You are expected to mitigate your losses, primarily by seeking new employment promptly. If you succeed in getting a new job, your lost earnings period (and thus your compensation) will be shorter. If you don’t even try to find work, the tribunal might conclude you failed to mitigate and reduce the period of loss they’ll compensate. For example, if evidence shows jobs in your field were plentiful and you could have gotten one in 2 months, the tribunal might only award 2 months’ lost earnings even if you remained unemployed longer by choice. The Estimator assumes you will mitigate reasonably; it might ask how long it took you to get a new job, or how long you expect it will take, to gauge your loss period.
• Contributory Fault: If you, as the claimant, are found partly responsible for the situation (e.g., you were dismissed for misconduct and the tribunal agrees you did something blameworthy), your compensation can be reduced. A common scenario: an unfair dismissal where the process was flawed (so you win the claim), but you did engage in some misconduct. The tribunal might reduce the compensatory award by a percentage (often corresponding to how blameworthy they find your conduct). In extreme cases, if your conduct was the main cause of your dismissal, they could reduce compensation by 100% (awarding nothing). The Estimator might not precisely quantify this, but it will note if you indicated some contributory factors that a reduction may apply.
• Would You Have Been Dismissed Anyway? (Polkey Reduction): Named after the Polkey case, this factor comes into play if the employer failed to follow procedure but argues that even had they done everything fairly, you would ultimately have lost your job regardless. If a tribunal agrees, it can reduce the compensation to reflect the chance that you would have been dismissed in the near future lawfully. For instance, if they assess there was only a 25% chance you’d have kept your job even with a fair process, they might cut your compensatory award by 75%. This is inherently a guess/assessment by the tribunal. Again, the Estimator can’t determine this probability, but it’s something to be aware of – especially in redundancy cases (employer may argue you’d still have been laid off) or misconduct cases.
• ACAS Code of Practice (Uplifts or Reductions): Tribunals take into account whether the employer and employee followed the ACAS Code of Practice on Disciplinary and Grievance Procedures. If the employer unreasonably failed to follow the Code (for example, no proper disciplinary hearing for a misconduct dismissal), the tribunal must consider increasing your compensation by between 0% and 25% as a punitive uplift. Conversely, if you (the employee) unreasonably failed to follow the Code (e.g., you didn’t appeal your dismissal or refused to attend a disciplinary meeting), the tribunal can decrease your award by up to 25%. These adjustments apply to most unfair dismissal and certain grievance-related claims. The Estimator, if it inquires about whether procedures were followed, may flag a potential uplift or reduction. For example, a full 25% uplift is not uncommon if an employer completely ignores fair process. These can significantly affect the final amount.
• Severity and Evidence in Discrimination Claims: For injury to feelings, as noted, the tribunal looks at the severity of the harm. Solid evidence (contemporaneous complaints, medical reports of stress, etc.) can support a higher award. Also, patterns of behavior (multiple incidents) push the award higher. If the discrimination was carried out by senior management or was particularly humiliating/public, that could aggravate the injury to feelings. On the other hand, a one-time insensitive remark with mild effect might be kept to the lower band. So, the range is broad – one case might get £5,000, another £45,000+ for injury to feelings depending on these factors. Personal injury damages (for any actual psychiatric injury) will depend on medical evidence and follow general personal injury compensation guidelines.
• Previous Payments or Benefits Received: If you received a redundancy payment, that may offset a basic award (since the formulas overlap). If you got any Employment and Support Allowance (ESA) or certain state benefits during unemployment, tribunals in the past would deduct some of those (under old rules, some benefits led to deductions in awards, though this area has been reformed such that benefit recovery is handled between DWP and employer after the award, rather than cutting your award directly). In any case, the Estimator might not dive into benefits, but be aware that some state benefits you received due to your job loss might be clawed back from the employer separately (under the Social Security (Recovery of Benefits) Act) – this doesn’t reduce what the tribunal awards you, but your employer may have to repay DWP for certain benefits.
• Settlement Received: If you already reached a settlement agreement with your employer and received money, you generally can’t claim further compensation for the same issue (the settlement usually waives tribunal claims). The Estimator assumes you haven’t settled. If partial settlements (like some money paid for one part of a claim) occurred, that would be accounted for by the tribunal.
• Costs and Conduct: While tribunals seldom award legal costs, exceptionally bad conduct by a party during the case (like pursuing a hopeless case or acting abusively in the process) can lead to a costs order which effectively reduces their net gain. However, as an employee, you typically don’t get your legal costs paid even if you win (unlike civil court) – so factor in that any compensation might have to cover what you spent on legal fees. This isn’t a direct reduction by the tribunal, but it affects how much you “keep”. (We mention this here because it’s a practical factor in how much you effectively get, and underscores why seeking at least some initial legal advice is wise.)

As you can see, many variables can influence the final award. Our Compensation Estimator attempts to incorporate the major factors (caps, length of unemployment, etc.) to give you a ballpark figure. However, it cannot perfectly predict tribunal discretion on things like contributory fault or Polkey reductions. Use the estimate as a guide, not a guarantee. For a personalized evaluation, consulting a solicitor is recommended – they can assess the nuances of your case and adjust expectations accordingly.

Tribunal Awards vs. Negotiated Settlements

Many employment disputes end in a settlement agreement rather than a full tribunal hearing. It’s useful to understand how a tribunal award (the outcome if you “win” at a hearing) compares to a negotiated settlement (an agreement reached out of court, often with the help of ACAS or lawyers):

• Risk vs. Certainty: Going to a tribunal is inherently risky – you might win big, but you could also lose and get nothing. The outcome can depend on witness credibility, legal technicalities, or the tribunal’s view of the evidence. A settlement, on the other hand, provides certainty. You know exactly how much money you’ll receive and on what terms. It may not be as high as the best-case tribunal award, but it’s guaranteed (and usually quicker).
• Amount of Compensation: Settlement amounts are often a compromise. They tend to be lower than the potential maximum tribunal award because they reflect the risks and costs saved by avoiding a hearing. However, some settlements can actually exceed what a tribunal might have awarded, especially if the employer strongly wants to avoid publicity or an adverse finding. Also, a settlement can sometimes include elements a tribunal can’t award – like an agreed reference or apology – which, while not monetary, have value to the employee.
• Impact of Mitigation (New Job): In a tribunal, your award for lost earnings stops when you get a new job (or is reduced by your new salary). In a settlement, the parties might agree on a figure assuming a certain unemployment period, but if you then find a job earlier than expected, you don’t have to repay any money. For example, you might settle for 6 months’ pay; if you land a new job after 2 months, you still keep the 6 months’ pay – effectively you come out ahead. In a tribunal, you would only get 2 months’ loss in that scenario. This is a reason some employees prefer a bird in the hand through settlement.
• Time and Stress: Tribunal litigation can be lengthy and stressful. On average it takes around 6 to 9 months from starting a claim to get a tribunal judgment (sometimes longer, especially with case backlogs). Hearings require you to relive events, be cross-examined, and endure the uncertainty throughout. Settlement negotiations, by contrast, can often be concluded in days or weeks. Avoiding the ordeal of a hearing can be a significant benefit in itself. Many find that a quicker, amicable resolution via settlement is better for their wellbeing than a protracted fight, even if the payout is a bit lower.
• Legal Costs: In tribunal, each side usually pays their own legal costs, win or lose. If you hire a solicitor, those fees can run into thousands of pounds, which could eat into any compensation you win. In a settlement, it’s common for the employer to contribute to the employee’s legal fees (especially in settlement agreements, typically a few hundred pounds or more). Often, employers will cover the full cost of your independent legal advice on the agreement (which is required for it to be valid). Thus, settling can effectively cost you nothing in legal fees, whereas a tribunal could. And since you rarely recover legal costs in a tribunal, a “win” that yields £10,000 might net you less if you spent £5,000 on lawyers to get there. This practical consideration leads many to favor a reasonable settlement over an uncertain trial.
• Confidentiality and Reputation: Tribunal hearings are public. Judgments are published online for anyone to read. Media can attend and report on juicy details. A settlement agreement, however, usually includes a confidentiality clause – both parties agree to keep the terms (and sometimes even the existence) of the settlement secret. This privacy can be very valuable to both sides. For employees, it means future employers or colleagues won’t easily find out you took your boss to tribunal. For employers, it avoids bad PR. If you negotiate a settlement, you can often include a clause that the employer will provide a neutral reference, and both parties will refrain from derogatory comments, which can help protect your reputation going forward. A tribunal, by contrast, can’t order your employer to give you a reference or silence them – it can only award money.
• Tax Efficiency: Settlement payments can sometimes be structured to be tax-free up to £30,000 (for the compensation for loss of employment). For example, payments ex gratia or as compensation for discrimination can often be paid without deductions up to that limit. In a tribunal award, your lost earnings are taxable as they would have been if you earned them normally. So a £30,000 tribunal award for lost wages might be subject to income tax and NI, whereas a £30,000 settlement might be agreed as tax-free. (This is a complex area and depends on the nature of the payment, but generally, settlements offer more flexibility in tax treatment.)

In summary, a tribunal award might yield a higher sum in some cases (especially if you have an exceptionally strong case and high losses), but it comes with risk, delay, and stress. A negotiated settlement offers speed, certainty, confidentiality, and often other perks (like a reference or agreed wording about the parting). Our firm often helps clients weigh these options. In fact, using our Estimator to understand your “tribunal value” can put you in a stronger position to negotiate a fair settlement – you’ll know roughly what you could get if you went all the way to a hearing, which is a good benchmark for settlement talks. Many disputes settle at somewhere between 50% and 80% of the potential tribunal award (depending on risk factors).

If you have an offer on the table, or you’re considering whether to settle or proceed, get legal advice. A solicitor can advise if the offer is fair or if you should push for more. Remember, once you sign a settlement agreement, you usually can’t go back and claim more later. So it’s critical to settle for an amount (and terms) you’re truly satisfied with.

Why Seek Legal Advice?

Employment law is complex, and while our Compensation Estimator is a powerful tool for insight, it’s not a substitute for personalized legal advice. Here are a few reasons why consulting an employment solicitor (like our team) can be invaluable:

• Maximizing Your Compensation: A lawyer can help identify all possible heads of claim you might have. You might come in thinking it’s “just unfair dismissal,” but an experienced solicitor may spot a potential discrimination angle or whistleblowing element that could remove caps on compensation or add an injury to feelings claim. They ensure nothing is left on the table. They can also help gather the right evidence to substantiate a larger award (for example, medical evidence for psychiatric injury, expert evidence for pension loss calculations, etc.).
• Realistic Expectations: As noted, people sometimes have unrealistic ideas from reading about headline cases. A lawyer will ground you in reality by examining the facts of your case against similar cases and tribunal statistics. For instance, if you earn £25k and were jobless for 3 months, they’ll let you know that a five-figure payout is unlikely, caps aside. Conversely, if your case genuinely could be high-value (say, a career-ending discrimination), they’ll give you the confidence to pursue what you deserve. Solicitors regularly review tribunal awards and can provide context – e.g., the average unfair dismissal award is only around £13,000 (and median ~£8,000), so they can explain when it’s worth fighting for more or when a settlement is prudent.
• Procedural Know-How: There are procedural hurdles (early conciliation, ET1 forms, tribunal deadlines, schedule of loss preparation) that can trip up those unfamiliar with the system. A missed deadline or a poorly drafted claim can ruin your chances regardless of merit. Legal advisors guide you through these steps, ensuring your claim is filed correctly and timely, and that you comply with all requirements. This avoids your case being struck out on a technicality.
• Strategic Advantage: Employers often have legal representation. Having your own evens the playing field. A solicitor can negotiate on your behalf – often achieving a better settlement than you might on your own. They know what arguments resonate with employers and their insurers. They can also advise when to settle and when to press on. Sometimes just having a reputable lawyer on your side can signal to the employer that you’re serious and compel them to raise their offer.
• Support and Stress Relief: Pursuing a tribunal on your own can be very stressful. You have to manage paperwork, legal arguments, possibly cross-examine witnesses – all while emotionally processing what happened to you. By engaging a lawyer, you offload much of that burden. They handle the legal heavy lifting, deadlines, and negotiations, allowing you to focus on moving forward with your life. If your case does go to a hearing, they will present it professionally, which can significantly improve the outcome (and your peace of mind). Many claimants feel a great relief once a solicitor is handling their case.
• No Win, No Fee / Insurance: Cost is a concern, but there are options like no-win-no-fee agreements in some cases, or legal expenses insurance (often part of home insurance) that can cover your legal fees. In a settlement, as noted, usually the employer covers at least some of your legal costs. Our firm offers a free initial consultation to discuss your case and options, so you can understand the potential value and cost-benefit before proceeding.

In short, getting legal advice can maximize your compensation, protect your rights, and reduce the stress of the process. Our lawyers can also advise you on the non-monetary aspects – for example, ensuring a settlement agreement has a good reference or nondisparagement clause, which a tribunal wouldn’t provide. We’ve seen too many people accept low settlements or make mistakes in claims because they went it alone. Even if you ultimately represent yourself, one meeting with a solicitor to review your case value (perhaps using the Estimator’s report as a starting point) can be hugely beneficial.

Bottom line: Knowledge is power. Use the free Compensation Estimator to educate yourself – then consider speaking with us for tailored guidance on strategy and value.

Frequently Asked Questions (FAQs)

Is there a cap on unfair dismissal compensation?

Yes, in ordinary unfair dismissal cases there is a statutory cap on the compensatory award. The cap is the lower of one year’s gross pay or a fixed amount set by law (which changes annually). For example, as of April 2025, the cap was £118,000. This means if you earn £30k a year, your max compensatory award is £30k; if you earn £150k, your max is ~£118k. The basic award (which is like redundancy pay) is in addition to this but is calculated with a capped weekly wage (e.g. £719 per week max). Note that this cap does not apply if your dismissal was for certain automatically unfair reasons like whistleblowing or health and safety – those cases are uncapped. Also, if you have other claims like discrimination alongside the dismissal, compensation for those claims is uncapped. In summary, for a standard unfair dismissal the compensatory part is limited, but there are important exceptions.

How is injury to feelings compensation calculated?

Injury to feelings awards are calculated using the Vento band guidelines. Instead of an exact formula, the tribunal assesses how serious the hurt or humiliation was and assigns the case to a band: – Lower band (less serious cases, one-off incidents): currently roughly £1,200 to £12,000. – Middle band (moderate cases): ~£12,000 to £36,000. – Upper band (most severe cases, eg. prolonged harassment or serious abuse): ~£36,000 to £60,000 (and higher only in very exceptional cases).

These ranges are periodically updated (the figures above are for claims after April 2025). To decide where in the band your case falls, the tribunal looks at factors like the duration of the discrimination/harassment, its severity, any medical effects, and the vulnerability of the victim. For example, being denied a promotion once due to discrimination might be lower band, whereas being bullied for months could be upper band. Concrete examples: In 2021–2022, the average injury to feelings award in sex discrimination cases was under £25,000 (median ~£18k), indicating many cases fall in the middle band. Our Estimator will suggest a band based on your inputs, but it’s ultimately a subjective determination. Remember, injury to feelings is only available for discrimination, whistleblowing detriment, and certain related claims – not for plain unfair dismissal or breach of contract.

Can I claim if I resigned because of mistreatment?

Yes – this is known as constructive dismissal. If you resign in response to your employer’s serious misconduct, the law can treat it as an unfair dismissal, meaning you can claim compensation just as if you had been fired. The mistreatment must be a fundamental breach of your contract (for example, not paying you, demoting you without reason, or allowing a culture of bullying) such that it forces you to leave. You must not delay too long in resigning after the breach, or you might be seen as having “accepted” the treatment. Also, you normally need the same 2 years’ service to claim constructive unfair dismissal (unless it was for an automatically unfair reason like discrimination or whistleblowing, where no service is required). The compensation in a successful constructive dismissal claim is calculated the same way as for unfair dismissal (basic award + compensatory award). Importantly, the time limit is still 3 months minus a day from when you resigned. Constructive dismissal cases can be tougher to prove – you have the burden to show you were entitled to resign – so seeking legal advice is highly recommended. But if you can prove it, you can recover damages. In fact, constructive dismissal coupled with something like discrimination can lead to very high awards (there have been cases with awards in the hundreds of thousands or more where, say, an employee was forced out due to egregious discrimination).

What are the employment tribunal time limits?

Most employment claims must be filed within 3 months (minus one day) of the event. This includes unfair dismissal, constructive dismissal, discrimination, harassment, victimisation, unlawful deduction of wages, maternity/pregnancy claims, etc.. A few claims have a 6-month limit, such as statutory redundancy pay claims and equal pay claims. The clock typically starts from: – the date your employment ended (for dismissal cases), or – the date of the last incident (for discrimination or pay cases).

You must also go through ACAS Early Conciliation before you can lodge the claim, but as long as you contact ACAS within the original time limit, you’ll get an extension for the conciliation period. ACAS gives you a certificate at the end, and your new deadline will be extended by the duration of conciliation (details of calculating that can be a bit complex, but roughly you get the time ACAS was involved added on). If you miss the deadline, tribunals enforce time limits strictly in most cases. Only very limited exceptions apply (like if it was not reasonably practicable to file in time due to something extraordinary, or in discrimination cases, if a tribunal in its discretion extends for just and equitable reasons). These are hard tests to meet, so don’t rely on extensions – it’s safest to assume the 3 or 6 month limit is absolute and plan accordingly. Our advice: mark your calendar, start ACAS conciliation early, and submit your ET1 claim well before the deadline if conciliation doesn’t resolve it.

(One more thing: if you’re still employed and facing issues, some claims – like discrimination or unpaid wages – can be brought while you’re employed, within 3 months of the incident. You don’t have to resign to claim those. But if you do resign and claim constructive dismissal, then 3 months from resignation applies.)

What’s the difference between a Basic Award and a Compensatory Award?

These terms mainly come up in unfair dismissal cases. The Basic Award is a fixed formula-based sum, similar to redundancy pay, that you get if you win an unfair dismissal claim. It doesn’t depend on your actual financial loss; it’s based on age, length of service, and weekly pay (with caps in place). Think of it as a sort of recognition of your service – for example, someone with many years of service will have a higher basic award than someone with few years, regardless of salary, up to the weekly cap and 20-year limit.

The Compensatory Award is intended to compensate you for the actual loss you suffered from losing your job. This includes loss of earnings, benefits, future losses, etc., up to the statutory cap (if applicable). The compensatory award is usually the much larger part of an award than the basic award. For instance, if you were a high earner or took long to find a new job, the compensatory award could be tens of thousands (subject to the cap), whereas the basic award might be a few thousand. On the other hand, if you found a new job immediately, your compensatory award might be very small (or even zero), but you’d still get a basic award (assuming you have 2 years’ service and qualify for unfair dismissal).

In summary, Basic Award = formulaic, service-based payment (like a “thank you for your service, sorry you were unfairly dismissed”), and Compensatory Award = make-whole payment for your actual financial losses. Both are added together for the total unfair dismissal award. (And remember, neither includes injury to feelings – that’s separate and only for discrimination cases.) The Estimator calculates both separately so you can see the breakdown.

Will I have to pay tax on my compensation?

It depends on the type of compensation: – Basic Award and Statutory Redundancy Pay: These are expressly tax-free by law. – Compensatory Award (for lost earnings): This is treated as income. Essentially, wages you would have earned are taxed as wages, even if paid as tribunal compensation. Typically, the tribunal award is given gross and your employer is responsible for deducting the appropriate income tax and National Insurance and giving you the net (just like a paycheck). – Injury to Feelings and Personal Injury Awards: These are generally tax-free, as they are considered damages for non-economic loss (similar to personal injury damages). – Settlement Agreements: In negotiated settlements, the first £30,000 of a non-contractual termination payment can be paid tax-free. This often covers things like ex gratia compensation for unfair dismissal or discrimination. Any contractual elements (like payment in lieu of notice that was in your contract) are taxable, and amounts above £30k are taxable. – Interest on Tribunal Awards: If the tribunal adds interest to your award (which they often do for discrimination awards if the case has been lengthy), that interest is taxable as miscellaneous income.

For example, if you win £10,000 for unfair dismissal lost earnings and £5,000 basic award, the £5,000 is tax-free, and the £10,000 will have tax/NI deducted (so you might receive, say, ~£8,000 net depending on your tax rate). If you also got £8,000 for injury to feelings (discrimination), that £8k would be tax-free. Our Estimator provides gross figures. You might want to set aside a portion for tax on elements that are taxable, or consult with us – we can help structure settlements to maximize your net recovery (one of the perks of settlement over tribunal is a bit more flexibility in tax treatment). Always confirm with a tax advisor or solicitor, especially for large awards, to avoid any surprises.

Have more questions? Our team is happy to answer them. Below is how you can reach out for tailored advice.

Get Expert Help or Try the Estimator Now

Understanding your potential Employment Tribunal compensation is a crucial step in deciding your next move. Our Employment Tribunal Compensation Estimator gives you a valuable estimate, but every case has nuances. If you’re looking for clarity on your situation or want to maximise your compensation, our experienced employment lawyers are here to help.

Contact us for a free consultation: We’ll review your case details, answer your questions, and advise on the best course of action – whether that’s pursuing a tribunal claim or negotiating a strong settlement. Our experts have a proven track record of securing justice and fair compensation for employees of all levels.

Or, use our online Estimator tool: It’s quick and confidential. In just a few minutes, you can get an instant estimate of your potential tribunal award. Use that knowledge to empower your negotiations or next steps.

Don’t navigate this complex process alone. Reach out to Settlement Agreement Lawyers today – we’ll ensure you understand your rights and options every step of the way, and fight to get you the compensation you deserve. Let’s take the next step together toward a fair resolution.