What would my potential liability be if an employee claims breach of contract or constructive dismissal?
Damages for breach of contract are normally the value of the employee’s net salary and benefits (for example loss of any commission, company car, pension rights etc) for the length of the employee’s notice period. An Employment Tribunal may only award breach of contract damages up to £25,000, but they can be unlimited in the County Court or High Court. If a constructive dismissal is also found to be unfair by an Employment Tribunal, then the damages comprise the basic and compensatory award. The basic award is calculated in the same way as a statutory redundancy payment — by reference to age, length of service and weekly wages (capped at £330 at the moment and subject to a maximum of £9,900). The compensatory award is calculated to compensate for loss of earnings and benefits between the date of resignation and the date of any tribunal hearing. An Employment Tribunal can also make an award for future loss of earnings. A former employee has a duty to minimise the loss by taking reasonab
