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How is compensation calculated in Irish employment law ?

Working it out

 

 

If you are preparing a claim for unfair dismissal you need to consider the question of compensation and how it is calculated.
How does the WRC adjudicator work out the amount of compensation which may be due to you ?


Let us assume that you have successfully presented your case for unfair dismissal. All thoughts then turn to the question of compensation. Under the Unfair Dismissal Act 1977 – 2015, the maximum compensation that an Adjudicator can award is two years remuneration. The calculation of the award is based on the financial loss incurred by you as a result of the dismissal. This brings up a number of factors.


The duty to mitigate


An employee who has been unfairly dismissed has a duty to mitigate their loss. This means that you have to use your best efforts to reduce the financial loss which you suffer as a result of being unfairly dismissed. The adjudicator will look at what efforts you have made to seek employment after your dismissal. You will need to provide evidence that you have applied to as many suitable job vacancies as you could. This could be a copy of the application form, letter of application, email with C.V attached, any replies received from the prospective employer etc. If you fail to show that you are actively seeking employment, then you will be penalised in the amount of compensation you receive.

 

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Available for work


In addition to applying for employment vacancies, you must be available for work. If you are in receipt of illness benefit from the Department of Social Protection or any other illness/disability payment then you are not available for work and this period may be disregarded by the adjudicator. An exception to this is where your illness is directly attributable to the actions of your employer, you may be able to claim for this loss. This is a complex area and you should contact us for expert advice if you believe that your employer’s conduct has caused your health to suffer.


Working at a lower rate of pay


This is where you obtain employment, but it pays less than your previous job, from which you were unfairly dismissed. In order to make this claim, you will need to provide written proof of the shortfall in wages. The simplest way to do this is using payslips, before and after. You will also need to deal with future pay. An adjudicator can deal with a period of two years in total, so your future loss will be two years minus your loss to date. For example, you have a loss to date of nine months, this leaves a balance of fifteen months for future loss. You should obtain evidence to show that your pay discrepancy will continue for that period (if that is in fact the case ).

No actual loss

It may be the case that you obtain employment immediately and suffer no financial loss. In cases where no financial loss has occurred, the maximum amount of compensation allowed is four weeks remuneration.

The conduct of the dismissed employee


If the adjudicator hearing the claim at the Workplace Relations Commission believes that the employee has contributed to their own dismissal, then the amount of compensation can be reduced by the percentage attributable to contributory actions of the dismissed employee. This can be difficult to ascertain. If you believe that you may have contributed to your own dismissal please talk to one of our experts. You may be wrong. If you have contributed in any way to your dismissal, then we will help to quantify that amount so that the employer cannot exagerate your contribution.

 

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What should I do next?

To make sure that you have not overlooked anything in your claim for compensation, you should contact us to review your case. We find from over thirty years experience that most employees get it wrong when it comes to calculating compensation. That is understandable. It is usually the first time to deal with soomething like this, the rules can be difficult.
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