There has been little case law determining the importance of an employer’s ability to pay compensation to an employee following unfair dismissal claims. However s123 of the Employment Rights Act allows the tribunal the discretion to award such sum to the employer as is “just and equitable in all the circumstances” having regard to the loss sustained by the employee. The Tribunal does not take into account whether the employer can afford to pay the compensation and the consequences of failure to pay on the employer’s workforce. We can all imagine the uproar of a workforce who don’t get paid!

 In the recent Tribunal decision of TAO Herbs and Acupuncture Limited v Mrs Y Jin His Honour Judge McMullen QC stated that the employer’s ability to pay a compensatory award is not a relevant consideration.

Emily Yeardley