compensation
n. Monetary payment to compensate for loss or damage. When someone has committed a criminal offence that caused personal injury, loss, or damage, and he has been convicted for this offence or it was taken into account when sentencing for another offence, the court may make a compensation order requiring the offender to pay compensation to the person suffering the loss (with interest, if need be). The power of the court to make compensation orders is governed by the Powers of Criminal Courts (Sentencing) Act 2000 sections 130–34. Magistrates’ courts may make orders in respect of compensation. The court must take into account the offender’s means and should avoid making excessively high orders or orders to be paid in long-term instalments. If the offender cannot afford to pay both a fine and compensation, priority should be given to payment of compensation. A compensation order may be made for funeral expenses or bereavement in respect of death resulting from an offence other than a death due to a motor-vehicle accident. Potential claimants and maximum compensation for bereavement are the same as those under the Fatal Accidents Act 1976 (see fatal accidents). An order may only be made in respect of injury, loss, or damage (other than loss suffered by a person’s dependants in consequence of his death) due to a motor-vehicle accident if (1) it is for damage to property occurring while it was outside the owner’s possession in the case of offences under the Theft Act 1968, or (2) the offender was uninsured to use the vehicle and compensation is not payable under the Motor Insurers’ Bureau agreement. A court that does not award compensation must give reasons. Victims of criminal injury may apply for compensation under the Criminal Injuries Compensation Scheme. Under the Theft Act 1968, a restitution order in monetary terms may be made when the stolen goods are no longer in existence; this kind of order is equivalent to a compensation order. Compensation orders may be made in addition to, or instead of, other sentences. A court must order a parent or guardian of an offender under the age of 17 to pay a compensation order on behalf of the offender unless the parent or guardian cannot be found or it would be unreasonable to order him to pay it.

A person who has been wrongfully convicted of a criminal offence may apply to the Home Secretary for compensation, which is awarded upon the assessment of an independent assessor.

An employment tribunal may order an employer to pay compensation to an employee who has been unfairly dismissed (see unfair dismissal). The compensation comprises a basic award of a sum equivalent to the statutory redundancy payment to which a redundant employee would be entitled (with a maximum award of £16,320 (or £544 per week up to 20 weeks’ pay) (correct as of 6 April 2021) when dismissal is for certain automatically unfair reasons, including trade union activity), and a compensatory award, representing the loss that the employee suffers because of the dismissal. Under the Enterprise and Regulatory Reform Act 2013, the compensatory award will be capped at one year’s pay or the statutory maximum, whichever is the lower, and the calculation will be based on the statutory definition of a week’s pay under the Employment Rights Act 1996, thus excluding pension contributions and fringe benefits. The statutory maximum for compensation awards is reviewed annually and is currently £88,519 (correct as of 6 April 2021).

Additional compensation may be awarded if the employer does not comply with an order by the tribunal to re-employ the employee; the additional award will be between 26 and 52 weeks’ pay. Limits on the amount of weekly pay that can be used in these calculations are set by regulations made by the Secretary of State for Business, Enterprise and Regulatory Reform and reviewed annually. From April 2021, the limit on a week’s pay is £544. The tribunal may reduce any compensation by an appropriate proportion when the employee’s conduct has contributed to his dismissal. Compensation may also be adjusted where either party fails to comply with a relevant code of practice. The employee is under the same duty to mitigate his loss as someone claiming damages in the courts. Thus, if he unreasonably refuses an offer of a new job he will not be compensated for his continued unemployment thereafter. If the employee was dismissed for his failure to enter into a closed-shop agreement, following pressure by a trade union for his dismissal, the employer can pass on to the trade union the liability to pay compensation. Compensation may also be awarded by an employment tribunal when there is a finding of unlawful discrimination. In such cases there is no upper limit on the amount of damages awarded. This can also include an amount for hurt feelings.

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