Unfair dismissal: Compensation should be fair and proportionate

When an employee is found to have been unfairly dismissed, compensation usually has two parts:

1. Basic award
   This is calculated in a similar way to statutory redundancy pay.
2. Compensatory award
   This should reflect the employee’s past and future financial losses. This award is capped at the lower of one year’s salary or the statutory maximum (although this cap will be removed from 1^st January 2027).

Contributory Fault

Tribunals can reduce compensation if the employee’s conduct is relevant to the dismissal. This is known as contributory fault.

In the circumstances, a basic award can be reduced if it’s just and equitable to do so, even if the employee conduct didn’t directly cause the dismissal. A compensatory award can also be reduced, but only if the employee’s conduct caused or contributed to the dismissal.

Kesheva v Secure Frontline Services

These principles were put to the test in Kesheva v Secure Frontline Services. Ms Kesheva, a door supervisor, left work mid-shift after an argument with a colleague. She was dismissed for gross misconduct without any investigation or proper procedure.

The employment tribunal found the dismissal was unfair but reduced both the basic and compensatory awards by 100%, saying that Ms Kesheva had committed gross misconduct by failing to contact her employer after leaving.

Decision overturned

The Employment Appeal Tribunal (EAT) overturned that decision.

Based on the tribunal’s own findings of fact, Ms Kesheva had informed her team leader that she was leaving, and there was no policy requiring her to make further contact by phone. Even if there had been, her actions would not have amounted to gross misconduct.

The EAT ruled that a 100% reduction wasn’t justified and sent the case back to a new tribunal to reconsider compensation.

Further reading

• Unfair dismissal – Dismissals – Acas
• Check what compensation you can get for unfair dismissal – Citizens Advice