Chris Brunt is a Gibraltar employment lawyer, a barrister and acting solicitor who will consider all employee cases on a “no win no fee” basis. If you are going through a disciplinary process or if you have been dismissed I would be happy to discuss your case with a free half-hour consultation.
Unfair Dismissal – How the Compensation Award is Calculated in the Gibraltar Employment Tribunal
If you have been dismissed by your employer and you are bringing, or contemplating bringing, a claim for unfair dismissal in the Gibraltar Employment Tribunal you will understandably be looking for new employment as soon as possible to compensate for your financial shortfall as you shortly will no longer be receiving a salary.
It is vital that anyone bringing a claim for unfair dismissal against their old employer records or documents their attempts to find new employment, (which I will explain below), this is because should you be successful in an unfair dismissal claim you will receive not only a Basic Award, which is an amount awarded based on your age, the length of your employment, and your salary but also a further award, the Compensation Award which is based on relevant financial losses.
Simply put this element of the award is stated in the Employment Tribunal (Calculation of Compensation) Regulations 2016, where section 3 sets out:
3. (1) “Subject to the provisions of this Regulation, the amount of the compensatory award shall be such amount as the Employment Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.”
(2) “The loss referred to in sub-regulation (1) shall be taken to include–
(a) any expenses reasonably incurred by the complainant in consequence of the dismissal, and
(b) subject to sub-regulation (3), loss of any benefit which the complainant might reasonably be expected to have had but for the dismissal.“
Note that the maximum compensation award in the Employment Tribunal for loss of salary is capped at 104 weeks (2 years).
Duty for an unfairly dismissed employee to mitigate their losses.
Subsection 4 of the Employment Tribunal (Calculation of Compensation) Regulations 2016 states,
(4) “In ascertaining the loss referred to in sub-regulation (1) the Employment Tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of Gibraltar.“
This is the duty for an employee to mitigate their losses. From a practical standpoint if you are found to have been unfairly dismissed by the employment tribunal and you have not attempted to seek replacement work, or if you have been offered employment elsewhere but have unreasonably declined it, then the employer (known in the tribunal as the Respondent) will not be liable to compensate you for your financial losses to the extent that your failure to attempt to mitigate was relevant.
How is the compensation payment calculated?
If you were paid by your dismissing employer, say, after-tax £1,500 per month, then your compensatory financial loss is obviously £1,500 for each month you are unemployed. If, following dismissal, you were immediately employed the following day elsewhere on the same salary then your compensatory loss with respect to loss of salary is zero.
What if you were unemployed following unfair dismissal for 3 months and then re-employed on the same salary? Then using the example above your compensatory award for lost earnings would be 3 x £1,500 or £4,500. But you would reduce this amount by any payments for unemployment benefits received as a result of being unemployed during this period. This is because you are only entitled to claim the amount you are out of pocket for losing your employment, and no more.
However, by way of example, and taking the example above, If you found employment the following day but your new salary was only £1,400 per month then your compensatory loss would be £100 pounds for each month worked thereafter (up to a maximum of 2 years) but possibly, if reasonable to do so, subject to further mitigation to find work that paid at least £1,500 per month).
The Compensation award, however, it is submitted, can be reduced by the tribunal in certain circumstances. Please see my post here on compensation award reductions for contributory fault and the ‘Polkey reduction’ for procural unfairness.
Failure by an employee to mitigate as stated above means that an ex-employer is not liable for financial losses that is if an ex-employee who has been unfairly dismissed has done nothing (or up to some point from dismissal onwards has done nothing) to seek new employment in order to extinguish, or to the fullest extent possible reduce their financial losses due to the loss of their salary.
It should be noted however that failure to mitigate does not affect the Basic Award which is also awarded to a successful claimant in addition to the Compensation Award. The Basic Award is an amount which is added to the Compensation Award and which is an extra payment awarded and which is calculated taking into account the claimant’s age, length of service, and salary.
Keep a record of job applications.
Because of your duty to mitigate your losses, it is extremely important that an employee who believes that they have been unfairly dismissed keeps a careful note of all the job applications they have applied for since being dismissed, including dates and so on, and the extent of the searches for employment and details of applications and their attempts and the extent they have sought employment. This will provide evidence, if called on to do so, by an employment tribunal in a Remedies Hearing following success in an employment tribunal Liability Hearing. It is also important that you register for unemployment benefits at the earliest opportunity so that your losses are reduced from the earliest opportunity to the fullest extent possible.
Burden of proof
It is submitted however that the burden of proof is not on a claimant (successful employee) to prove that they have mitigated their loss. It is for the respondent (the dismissing employer) to introduce evidence to prove on the balance of probabilities that the claimant has failed to do so. That said it is highly recommended that a dismissed employee who is bringing a claim, or contemplating bringing a claim, ensures that they are able to provide evidence to rebut any suggestion (or evidence) introduced by the respondent that they have failed to mitigate their loss.
Keep records of all expenses too
It is also important to note that it is not only your salary losses that are potentially recoverable as sub-regulation. (2) states
(2) The loss referred to in sub-regulation (1) shall be taken to include–
(a) any expenses reasonably incurred by the complainant in consequence of the dismissal,
So it is also important to keep receipts for any expenses incurred as a consequence of the dismissal, for instance, travel receipts for travelling to interviews or in fact for any reasonable expense that you have been put to as a result of your losing your job and having to seek re-employment elsewhere.
In addition to the Compensatory Award the Employment Tribunal can also award a further payment known as the Basic Award. This is an amount which is calculated taking into account the number of complete years worked, the age of the successful Claimant, and the Claimant’s salary. The Basic Award will be discussed in a later post.
Chris is an Employment Law Barrister and Acting Solicitor of the Supreme Court of Gibraltar who specialises in Employment Law.
Are you an employee who has been dismissed? Or perhaps you are an employer who wishes to reduce the risks of an unfair dismissal claim against them? Please contact me at Phillips Barristers and Solicitors at 292 Main Street, Gibraltar. Telephone (+350) 200 73900, or email me at chris.brunt@phillips.gi for an informal discussion to see how I can assist you.
Disclaimer
All opinions are my own and are provided for information only and do not constitute legal advice. Please note that the information and any commentary on Gibraltar law contained in this article are provided free of charge for information purposes only. Every reasonable effort is made to make the information and commentary accurate and up to date, but I do not accept responsibility for its accuracy and or for any consequences of relying on it. The information and commentary do not and are not intended to, amount to legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal legal advice about your case or matter and not to rely on the information or comments on this site. https://www.employmentlawgibraltar.com/
