Today, I give aa brief overview of the provisions relating to compensation for unfair dismissal under the Employment Rights Act, 2012.
Section 33 of the act provides that once a complaint for unfair dismissal has been found to be established, the Employment Rights Tribunal must explain to the employee the orders for reinstatement and re-engagement and the circumstances in which such orders can be made and inquire of the employee whether he wishes the Tribunal to make such an order.
Where the tribunal determines that it is not appropriate to make an award for reinstatement or re-engagement or where the tribunal makes such an order and it is not complied with, the tribunal shall in accordance with section 37 of the act make an award for compensation for unfair dismissal to be paid by the employer to the employee.
Where neither an order for reinstatement nor re-engagement has been made the tribunal must make an order for compensation calculated in accordance with the Fifth Schedule of the act.
That schedule provides for an award consisting of the aggregate of the following amounts:
(1) A basic award determined in accordance with the statutory formula set out in the act. This compensation depends on the length of the period of continuous employment of the employee and the weekly earnings of the employee;
(2) An amount such as the tribunal thinks fit in respect of any benefit which the employee might reasonably be expected to have had but for the dismissal;
(3) An amount, not exceeding 52 weeks’ wages, where the dismissal was for a reason specified in section 30 (1)(c) or, where there was more than one reason for dismissal, one of those reasons was a reason so specified.
Those reasons are in fact the automatically unfair reasons for dismissal. For example, if an employee was dismissed because of his race, colour or religion that dismissal would be subject to an award based on this provision in the act.
The basic award is not intended to be an award for lost earnings. The award is calculated similarly to an award of severance payment.
The act gives detailed guidance on the calculation of a week’s wages in the Sixth Schedule to the act. It also sets out clear rules for the calculation of the basic award. Your attorney-at-law should be consulted, immediately after a dismissal, for advice on these matters, along with the other provisions that I have mentioned herein.
For example, the amount of compensation may change depending on what payments the employer makes to the employee at the time of dismissal.
In my next article I want to focus mainly on those provisions that give the tribunal the authority to determine the amount of compensation.
• Cecil McCarthy is a Queen’s Counsel.
