Compensation: We Can’t Afford it!

In Tao Herbs & Acupuncture Limited v Jin, Mrs Jin was awarded around £11,000 in compensation for unfair dismissal.  The employer appealed. They contended that the Tribunal had erred in that it did not consider the employer’s ability to pay the judgment and therefore was not just. 

The EAT held that the Tribunal was correct in its approach, stating “…the assessment of an award for unfair dismissal, … does not pay attention to the ability of the employer to pay. There are places in the employment protection canon where ability to pay is a feature (see for example the costs regime). But in the assessment of damages for a statutory tort, the possibility that the employer will be in difficulty paying an award is not a relevant consideration.” 

This confirms the position that the financial position of the employer is not relevant when determining levels of compensation.