How much compensation could you get for unfair dismissal?

It is the first question most people ask after being dismissed, and the honest answer is that the statutory caps matter far less than the facts of your case. Here is how the numbers are actually built.

The two parts of an unfair dismissal award

The basic award is a formula, the same one used for statutory redundancy pay: half a week's pay for each year of service under 22, one week's pay for each year from 22 to 40, and one and a half weeks for each year at 41 or over. Weekly pay is capped at a statutory maximum reviewed every April, and only your last 20 years of service count. For most people this part is thousands, not tens of thousands.

The compensatory award is where the real money is, and it is based on your actual losses: lost earnings from dismissal to the hearing or until you find equivalent work, lost benefits and pension, and the cost of finding a new job. It is capped at the lower of 52 weeks' gross pay or a statutory ceiling, currently £123,543 (from April 2026). One change worth knowing: under the Employment Rights Act 2025 that cap is due to be abolished from 1 January 2027. Most awards come in far below the cap, because most people find new work within months and are expected to try.

What moves the number up or down

• How long you are out of work. The single biggest factor. You are expected to mitigate your loss by looking for a new job, and your award reflects what you actually lose, so keep records of every application.
• Your conduct. A tribunal can reduce the award, in rare cases to nothing, if your own behaviour contributed to the dismissal.
• The Polkey question. If a fair process would probably have led to the same dismissal, the award can be cut to reflect that. A botched process does not automatically mean a full award.
• The ACAS code. If either side unreasonably failed to follow the ACAS Code of Practice, the award can move by up to 25 percent either way.
• Whether other claims attach. Ordinary unfair dismissal is capped. Discrimination and whistleblowing-related dismissals are not, and can include an award for injury to feelings. The same dismissal can look very different in value depending on what sits behind it, which is why the first thing a specialist does is work out which claims you actually have.

What this means before you claim

The tribunal median is far below the headline caps, and most claims settle before a hearing. The realistic question is not "what is the maximum" but "what is my case worth, discounted for risk, and what would a settlement look like against that?" That valuation, done early, is what stops people spending months fighting for less than they were offered in week one.

Do not forget the deadline: three months less one day from your dismissal, with ACAS early conciliation pausing the clock.

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