In Tim Arrow and Sons v Onley, the EAT has held that where an employee is entitled to a statutory uplift on an award of compensation, the uplift will not apply to any amounts that have been paid to the employee prior to the tribunal hearing.
Mr Onley was dismissed without receiving notice pay or redundancy pay and without the employer having followed the statutory dismissal procedures (which applied at the time). Mr Onley brought a claim for unfair dismissal before the tribunal but, one week before the hearing, the employer paid him his notice and redundancy payments. At tribunal it was held that Mr Onley had been unfairly dismissed and the tribunal applied the maximum statutory uplift of 50% to the compensation awarded to him. The employer appealed. The EAT held that the statutory uplift applied only to awards made by the tribunal and not to payments made to the employee before the tribunal hearing.
Impact on employers
Tactically, it may be advisable in some cases for the employer to make certain payments to the employee before the hearing, particularly where it is at risk of an uplift on compensation awards (which is now limited to 25% for unreasonable non-compliance with the ACAS code on discipline and grievance).