Tribunal and unfair dismissal claims – How much compensation can you expect to receive?

One of the first questions clients ask us after a dismissal is how much compensation they might receive. It is an entirely understandable question, and while every case turns on its own facts, the way tribunals calculate awards follows a clear structure.

If an unfair dismissal claim succeeds, compensation is usually made up of two elements: a basic award and a compensatory award. For dismissals taking effect on or after 6 April 2026, the basic award can be up to £22,530, and the compensatory award is limited to the lower of £123,543 or 52 weeks’ gross pay.

Two important changes are also on the horizon. From 1 October 2026, the time limit for bringing most tribunal claims will increase from three months to six. From 1 January 2027, the cap on the compensatory award will be removed altogether. In this guide, we explain how awards are calculated, what claimants typically receive in practice and what these changes will mean for employees and employers.

Unfair dismissal compensation limits for 2026

The statutory limits are reviewed each April. The figures below apply where employment ended on or after 6 April 2026; lower limits apply to earlier dismissals.

How the basic award is calculated

The basic award is calculated in the same way as a statutory redundancy payment. It depends on three factors: your age, your length of continuous service and your weekly pay, which for these purposes is capped at £751. For each complete year of service, up to a maximum of 20 years, you are entitled to:

• half a week’s pay for each year worked while under the age of 22
• one week’s pay for each year worked between the ages of 22 and 40
• one and a half weeks’ pay for each year worked at age 41 or over

If you have already received a statutory redundancy payment in connection with the same dismissal, this will usually be deducted from the basic award.

How the compensatory award is calculated

The compensatory award is intended to put you, as far as money can, in the position you would have been in had you not been unfairly dismissed. It is designed to compensate you for your losses rather than to punish your former employer, and it can include:

• lost earnings up to the date of the tribunal hearing, together with future losses while you look for suitable new work
• lost pension contributions and other benefits, such as a company car or private medical insurance
• a sum for “loss of statutory rights”, usually a few hundred pounds, to reflect the fact that you will need to build up service again with a new employer before certain employment protections apply

The tribunal will also expect you to take reasonable steps to find alternative employment, which is known as “mitigating” your loss.

A worked example

To show how these elements come together, consider the following example.

Sam is 30, has worked for the same employer for five years and earns £900 a week gross, or £700 a week after tax. Sam is unfairly dismissed and, despite applying for a number of roles, takes 20 weeks to find a new job on similar pay.

This is an illustration only. In a real case, the figures may be increased or reduced for the reasons we explain below, and the final award will depend on the evidence presented to the tribunal.

What can increase or reduce an award

The Acas Code of Practice

The Acas Code of Practice on Disciplinary and Grievance Procedures sets out the standards employers and employees are expected to follow. If your employer unreasonably failed to follow the Code, the tribunal can increase your compensation by up to 25%. Equally, if you unreasonably failed to follow it, for example by not appealing against your dismissal, your award can be reduced by up to 25%.

Contributory conduct

Where a tribunal finds that your own conduct contributed to your dismissal, it can reduce your compensation by such amount as it considers just and equitable.

The “Polkey” reduction

Sometimes a dismissal is unfair because the employer followed the wrong procedure, even though a fair procedure might well have led to the same outcome. In those circumstances, the tribunal can reduce the compensatory award to reflect the likelihood that you would have been dismissed anyway. This is known as a Polkey reduction, after the case in which the principle was established.

When compensation is not capped

The statutory cap does not apply to certain types of automatically unfair dismissal, including dismissal for whistleblowing or for raising particular health and safety concerns. There is also no cap on compensation in discrimination claims.

Where discrimination is established, you may also be awarded compensation for “injury to feelings”. Tribunals assess this using the Vento bands, named after the case in which they were first set out, which were updated on 6 April 2026:

In the most exceptional cases, awards above £62,900 can be made.

Average unfair dismissal compensation

The most recent published figures, covering April 2023 to March 2024, show a median unfair dismissal award of £6,746 and a mean award of £13,749. The highest unfair dismissal award made in that period was £179,124.

Discrimination awards tend to be higher. In the same period, the median award for disability discrimination was £17,218, with a mean of £44,483.

It is worth bearing in mind that these statistics only reflect the relatively small number of cases that reach a final judgment. In our experience, the majority of disputes are resolved before a hearing, often through a negotiated settlement agreement, which can provide certainty for both sides without the cost and stress of a tribunal.

What is changing in October 2026 and January 2027

Longer time limits for bringing a claim

From 1 October 2026, the time limit for bringing most employment tribunal claims will increase from three months to six months. This gives employees more time to take advice and consider their position. However, you must still contact Acas to begin early conciliation before a claim can be issued, and we would always recommend seeking advice as early as possible rather than relying on the longer deadline.

The removal of the compensation cap

From 1 January 2027, the statutory cap on the compensatory award will be removed where employment ends on or after that date. At the same time, the qualifying period for ordinary unfair dismissal claims will reduce from two years to six months. Our guide to the Employment Rights Act 2025 explains these and the other reforms in more detail.

For higher earners in particular, this is a significant change, as their losses will no longer be limited by the statutory maximum. For employers, it means that the potential cost of an unfair dismissal claim will no longer be fixed, and we are advising businesses to review how they manage dismissals, particularly where an employee’s notice period will end in 2027.

Frequently asked questions

How much compensation will I get for unfair dismissal?

This depends on your age, length of service, pay and the losses you have suffered. The median award in the most recent published figures was £6,746, but awards can be considerably higher where losses are significant or long term.

What is the maximum unfair dismissal compensation in 2026?

For dismissals taking effect on or after 6 April 2026, the basic award is capped at £22,530 and the compensatory award at the lower of £123,543 or 52 weeks’ gross pay. The cap on the compensatory award will be removed from 1 January 2027.

How long do I have to make an unfair dismissal claim?

Until 30 September 2026, the time limit for most claims is three months less one day from the date your employment ended. From 1 October 2026, this increases to six months. In either case, you must start Acas early conciliation before you can issue a claim.

Is unfair dismissal compensation taxable?

The first £30,000 of a termination payment may be free of tax, but payments relating to earnings, such as notice pay, are treated differently. Because the position depends on how an award or settlement is structured, we recommend taking advice on your own circumstances.

Do I need two years’ service to claim unfair dismissal?

For dismissals taking effect before 1 January 2027, you will usually need two years’ continuous service, although some automatically unfair dismissals require no qualifying service at all. From 1 January 2027, the qualifying period reduces to six months.

How our employment team can help

Whether you believe you have been unfairly dismissed or you are an employer responding to a claim, taking advice at an early stage can make a real difference to the outcome. Our employment team helps employees bring unfair dismissal and tribunal claims, advises employers on defending and resolving claims and negotiates settlement agreements on behalf of both.

We will give you a clear and honest view of the strength of your position and what your claim may be worth. To speak to a member of the team, please call us on 0161 930 5151, email employmentteam@gorvins.com or contact us online.

This guide is for general information only and does not constitute legal advice. Figures apply to England, Wales and Scotland as at 28 September 2026.