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You may either succeed in defending a tribunal claim or lose the claim - in whole or in part.

If you lose an unfair dismissal case, you may be ordered to comply with one of the following orders:

• Reinstatement to the old job as if the claimant had never been away, on the same terms and conditions and with back pay and benefits - eg pension rights - for the period since the dismissal.
• Re-engagement in a new job on similar terms and conditions to the old position. You may not have to pay any back pay if the employee's conduct contributed to their dismissal.
• Financial compensation, which is by far the most common outcome. See compensation for successful employment tribunal claims.

Tribunals/arbitrators will only order reinstatement or re-engagement if they believe it can actually work. If you are ordered to re-employ the employee but you do not comply, it may increase the financial compensation.

Costs and expenses

Costs can be awarded in exceptional circumstances by the Tribunal, where they consider one party has acted unreasonably in pursuing or conducting their case. For example:

• A cost award can be made to cover legal costs for parties who were legally represented at the time the case was heard.
• A preparation time award covers time spent preparing for a case for a party who isn't legally represented.
• Wasted costs orders are made directly against a paid representative on account of their own unreasonable conduct. This only applies to representatives who are acting in pursuit of profit, eg paid legal representatives.

The limit on costs that the tribunal may itself award is 拢10,000, but a tribunal may order costs as assessed by an officer of the County Court, in which case the limit does not apply. Parties may also agree that costs of more than 拢10,000 are to be paid.

Cost awards cannot be made by an arbitrator.

The award to the claimant of financial compensation is the most common outcome of a successful tribunal claim.

Compensation in discrimination cases

There is no limit on the amount of compensation which can be awarded in cases of unlawful discrimination. Read how to prevent discrimination and value diversity.

Compensation in unfair dismissal cases

There are three types of compensation for unfair dismissal:

• basic awards
• compensatory awards
• additional awards

Basic award

The basic award depends on:

• The employee's age - counting back from the date of dismissal, they receive 1.5 weeks' pay for each year of employment after their 41st birthday, one week's pay for each year of employment after their 22nd birthday and 0.5 week's pay for each year of employment up to their 22nd birthday.
• Their length of service with you - counting back from the date of dismissal, this is capped at 20 years.
• Their weekly pay - this is subject to the statutory limit on a week's pay, which is currently 拢749 in 2025-26.

Therefore:

• the maximum basic award is 1.5 x 20 = 30 weeks' pay
• the maximum amount that can be awarded is 30 x 拢749 = 拢22,470

Compensatory award

The compensatory award is based on the tribunal's/arbitrator's assessment of the employee's loss of earnings between the dismissal and the tribunal/arbitration hearing, and the likely future loss of earnings, loss of pension rights etc.

Reinstatement or re-engagement orders

If you do not comply with an order for reinstatement or re-engagement the tribunal/arbitrator can make an additional award.

The award is on top of any previous award and can be between 26 and 52 weeks' pay - although this is again subject to the 拢749 statutory limit on a week's pay.

Compensation in collective redundancy cases - failure to consult representatives

In a collective redundancy situation, you have a legal duty to consult with representatives of those employees affected by the proposed redundancies.

If you fail to do this, an employee or a representative may apply to a tribunal for a protective award. If the tribunal decides in their favour, it may order you to pay each affected employee up to 90 days' pay.

This payment is calculated on the basis of a week's pay. Note that if you are made to pay such an award, there is no statutory cap on a week's pay.

For more information on collective redundancy consultation, see redundancy: the options.

Compensation in business transfer cases - failure to inform and consult representatives

In business transfer situations, you must inform and consult with representatives of those employees affected by the transfer.

If you fail to do this, an employee or a representative may apply to a tribunal for compensation. If the tribunal or arbitrator decides in their favour, it may award compensation to each affected employee of up to 13 weeks' pay.

Note that for such awards, there is no statutory cap on a week's pay.

Read more on informing and consulting employees about business transfers.

Guarantee pay

If you do not require an employee to work on a day when they would normally be contractually obliged to work, you may be required to make a guarantee payment to them. Failure to pay an employee who is entitled to guarantee pay is unlawful and the employee may take you to a tribunal. If the tribunal or arbitrator finds in the employee's favour you may be ordered to pay the employee the guarantee pay.

In order to be entitled to guarantee pay, the employee must meet certain requirements. For more information on guarantee pay and to find out if your employees may be entitled to guarantee pay, see guarantee pay: employee entitlement.

Compensation in trade union-related cases

There is a separate award for cases in which the tribunal/arbitrator finds that you have made unlawful inducements to individuals in relation to their trade union membership/activities and collective bargaining.

Read more on trade union membership rights in the workplace.

Compensation in breach-of-contract cases

Where an employee makes a breach of contract claim to an industrial tribunal (or an employer makes a counterclaim), there is a maximum amount that may be awarded in respect of that claim (or of a number of claims arising from the same breach of contract).

For details of minimum and maximum amounts and how these may be adjusted, see tribunal/arbitration compensation amounts and adjustments.

The amount of compensation awarded following a tribunal/arbitration process will depend on the nature and outcome of the case.

The limits on certain awards and payments are varied annually according to the Retail Price Index.

Tribunal/Arbitration awards can be increased or decreased if the employer or employee unreasonably failed to follow appropriate disciplinary or grievance procedures.

An award can also be decreased where the claimant is found to have contributed to their dismissal by their actions. This is known as contributory conduct and can result in awards being reduced by up to 100%.

The arbitrator will apply the same rules as the tribunal when calculating awards.

See a table of current tribunal and arbitration compensation limits.

Adjustments to tribunal awards

A tribunal/arbitrator may increase any award made to an employee in respect of unfair dismissal by between 10% and 50% if you unreasonably failed to comply with the statutory disciplinary procedures referred to within the Labour Relations Agency (LRA) Code of Practice on Disciplinary and Grievance procedures. The tribunal/arbitrator can also reduce an award by between 10% and 50% if the employee unreasonably failed to comply with the statutory procedures.

A tribunal/arbitrator may vary any award made to an employee in respect of workplace grievances by up to 50% (either up or down) where there has been an unreasonable failure by either party to observe the good practices set out in the LRA Code of Practice on Disciplinary and Grievance procedures.

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Interest on tribunal awards - Industrial/Fair Employment Tribunal

If you do not pay an award within 42 days of the date when the tribunal's decision is sent to the parties, you will start paying interest only on the amount of award outstanding.

In cases of unlawful discrimination judgments, interest accrues from the date the decision is sent to the parties. However, no interest is charged if you pay the award in full within 14 days.

Interest on tribunal awards - Arbitration

If you do not pay an award within 42 days of the date when the arbitrator's decision is sent to the parties, you will start paying interest only on the amount of award outstanding.

Amounts recouped by the Social Security Agency (SSA) are not included in the calculation of interest - see recouping state benefits from employment-related tribunal awards.

Failure to pay tribunal awards

If you are an employer and you fail to pay an Industrial Tribunal/Fair Employment Tribunal or Arbitrator's award made against you, enforcement action can be taken through the Enforcement of Judgments Office (EJO).

Any enforcement action will result in additional costs being incurred and these will be added to the outstanding amount due. You will have to pay these costs as well as the original award. The claimant may also be able to charge interest on the amount owed. Enforcement action through the EJO may also impact adversely on your credit rating.

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Deductions for income tax and National Insurance

Where the employment relationship has already ceased, you do not normally have to deduct income tax and National Insurance contributions (NICs) from tribunal/arbitrator awards (these awards are generally based on net pay).

However, if:

• an award is over 拢30,000, income tax may be payable
• a tribunal orders reinstatement or re-engagement, you must deduct income tax and NICs from the pay for the period between the date of dismissal and the date of reinstatement or re-engagement

To find out more about your tax and NICs obligations, contact the HMRC Employer Helpline on Tel 0300 200 3200.

To prevent double payment, the Social Security Agency (SSA) can recover from you some or all of the amount of Jobseeker's Allowance, Income Related Employment, and Support Allowance and Income Support ('state benefit') it pays to an ex-worker who is then awarded compensation by an employment-related tribunal. This process is known as 'recoupment'.

Cases where the recoupment rules apply

These rules apply when a tribunal makes a monetary award for:

• unfair dismissal - including interim relief orders
• failure to make a guarantee payment
• failure to pay an individual employee a protective award
• failure to pay wages during a period of medical or maternity suspension
• compensatory awards in discrimination cases

The rules also apply to awards for failure to consult workplace representatives in collective redundancy situations, ie protective awards themselves.

Recoupment and monetary awards

If an individual receives state benefit during the period covered by a monetary award, the SSA must be repaid any benefit received during this period.

Any amount of the award that represents arrears of pay - or compensation for loss of earnings - up to the date of a tribunal is recoverable by the SSA. This part of an award is called the 'prescribed element' and is the only part of the award that can be recouped.

Recoupment and monetary awards - Tribunal

Where an award of compensation is made by a tribunal, the tribunal will identify how much of the award represents arrears of pay up to the date of the tribunal hearing (prescribed element).

You should pay the employee the difference between the prescribed element and the total award immediately.

However, you must not pay the prescribed element to the individual until you receive a recoupment notice from the SSA. If you pay the prescribed element to the individual beforehand, you will still have to pay the SSA the amount specified in the notice.

You will receive a notification from the SSA:

• where a judgment is announced at the tribunal hearing - within 21 days following the announcement or within nine days of the judgment being sent to the parties, whichever is later, or as soon as practicable after this period
• where no such announcement is made - within 21 days of the judgment being sent to the parties or as soon as practicable after this period

The recoupment notice will tell you to pay the lesser of:

• the prescribed element - after any income tax and National Insurance contributions (NICs) due have been deducted
• the total amount of state benefit received by the individual for any part of the period covered by the prescribed element

When you receive notification, you must - if you haven't already - immediately pay the difference between the prescribed element and the total award to the employee.

Recoupment and monetary awards - Arbitration

Where an award of compensation is made by an arbitrator, it will be the responsibility of the claimant to discuss any recoupment required with the SSA. For reasons of confidentiality, the arbitrator will not disclose any information directly to the SSA but will advise the claimant in writing of their obligations.

Recoupment and protective awards

If an industrial tribunal or arbitrator finds that you failed to consult workplace representatives in a collective redundancy situation, you may be required to pay a protective award to the redundant employees or those you proposed to make redundant.

Read about the redundancy consultation process.

Recoupment and protective awards - Tribunals

When an industrial tribunal makes a protective award, it will notify the SSA and advise you to send the SSA the following information:

• the name, address, and National Insurance number of each employee entitled to a payment under the award
• the date - or proposed date - of termination of employment of each employee covered by the award

You must send the information within ten days of the judgment being announced at the hearing or, if not when it was sent to the parties. If you can't meet this deadline, you must do it as soon as reasonably practicable.

The SSA will send you a recoupment notice within 21 days of receiving the above information or as soon as practicable. You must not pay any employee who has claimed or received 'state benefit' until you receive this notice.

The recoupment notice will tell you to pay a specified amount to the SSA out of the amount due under the award. This amount will be the lesser of the:

• amount due - after the deduction of any income tax and NICs - from the start of the protective award period to when you sent the SSA the necessary information
• total amount of the 'state benefit' received by an employee for any part of the same period

Once you receive notification, you must immediately pay the employees any difference between the recoupment amount and the total protective award.

If you pay an employee this amount before receiving a recoupment notice, you will still have to pay the SSA the amount specified in the notice.

Recoupment and protective awards - Arbitration

Where an arbitrator makes a protective award it will be the responsibility of the claimant to discuss any recoupment required with the SSA. For reasons of confidentiality, the arbitrator will not disclose any information directly to the SSA but will advise the claimant in writing of their obligations.

Recoupment following appeals - Tribunal decisions

If you appeal - or apply for a review - the SSA should suspend recoupment until the outcome is known.

If the SSA has already recouped and the amount of recoupable benefit is subsequently altered as a result of an appeal or review, the SSA will pay back any excess or recover a further amount as appropriate.

Recoupment following an appeal or challenge to an award made by an arbitrator

Where an appeal or a challenge is lodged in respect of an award made by an arbitrator, the claimant should notify the Social Security Agency and seek guidance from them on the timing of any recoupment that may apply.

The following information applies only to reviews and appeals of cases that are determined by the Industrial/Fair Employment Tribunal.

To read more about appealing/challenging an arbitrator's award, . Section 9 provides further details on appealing/challenging the award.

Employment-related tribunal judgments and decisions may be changed only:

• if the tribunal decides - at the request of either side or on its own initiative - to review the judgment
• after an appeal by one of the sides involved in the judgment - see appealing against an employment-related tribunal judgment

Getting a tribunal to review a default judgment

You can apply to the tribunal to ask it to review a default judgment. A default judgment is a decision made on a tribunal claim in the absence of a response to a claim within the time limit, or not at all. If it is issued, an employer will not be able to take any further part in the proceedings dealing with the claim. You must apply in writing within 14 days of the date the judgment was sent to you by the tribunal office. Your application must state why the default judgment should be reviewed.

An employment judge may extend the time limit for reviewing a default judgment but only if they think it is just and equitable to do so.

In these circumstances, your application must include:

• your response to the claim
• an application to extend the time limit for presenting the response
• an explanation of why the tribunal did not receive a response containing the necessary information or an application to extend the time limit within the time limit for responding

The tribunal has the power to refuse to review the default judgment, confirm it, change it or revoke it.

Getting a tribunal to review other judgments and decisions

You can apply to the tribunal to ask it to review a:

• decision not to accept your response to a claim
• non-default judgment - ie a judgment other than a default judgment

You must apply in writing within 14 days of the date the judgment was sent by the tribunal office. An employment judge may extend the time limit for reviewing a judgment but only if they think it is just and equitable to do so.

The tribunal may review a decision not to accept your response to a claim if:

• it is in the interests of justice, or
• the decision was wrongly made as a result of an administrative mistake

The tribunal may review a non-default judgment only where:

• The judgment was made in the absence of one side.
• The judgment was wrongly made as a result of an administrative mistake.
• One side did not receive notice of the proceedings leading to the judgment.
• New evidence has become available since the end of the hearing to which the judgment relates, provided its existence could not have reasonably been known at that time.
• It is in the interests of justice to carry out a review. This does not mean a judgment or decision will be reviewed just because you disagree with it. Something must have gone wrong at - or in connection with - the hearing or something must have happened since the hearing which makes the judgment or decision unjust.

If you apply for a review based on new evidence, you must explain why the evidence was not available beforehand and include a full statement of the evidence which you want to introduce.

The tribunal has the power to refuse to review the judgment or decision, confirm it, change it, or revoke it.

Relationship between an application for review and appeal

An application for review does not change the time limit for making an appeal to the Court of Appeal, ie you may appeal to the Court of Appeal while waiting for the result of the application - see appealing against an employment-related tribunal judgment.

You must also lodge with the Court of Appeal a copy of the application for review and, if the application has been heard and determined, a copy of the tribunal's decision on the review.

You may only appeal to the Court of Appeal on a point of law.

Broadly, a point of law is one that concerns the interpretation of the legislation and its application to the facts of the case.

Where an Industrial Tribunal or the Fair Employment Tribunal has made findings of fact based on the evidence it has read or heard, eg where the tribunal sets out what they believed actually happened, or why someone acted as they did, you cannot challenge this - even if you think that the tribunal was wrong to make those findings.

As well as appeals against judgments, appeals to the Court of Appeal can also be made against Interim decisions, directions, or orders made by a tribunal. An appeal to the Court of Appeal may therefore be made where, for example, the tribunal has granted or refused to grant a witness order, a postponement, or a deadline extension.

If you intend to take a case to the Court of Appeal you are strongly advised to seek further information and advice.

Appealing/Challenging an Award made by an arbitrator

To find out more about appealing/challenging an award, . Section 9 provides further details on appealing/challenging the award.