Unfair dismissal remedy includes £4,000 for loss of company car despite new job
A former employee with two years' service won £2,575.34 in unfair dismissal compensation after losing his company car, even though he found a higher-paying job. The tribunal awarded £4,000 for the car benefit, reduced by 75% for contributory fault.
1 min read · Last updated 18 May 2026
Case details
Key facts
- The claimant was employed from 1 February 2019 to 1 December 2021.
- The claimant's unfair dismissal claim succeeded.
- A 75% contributory fault deduction was applied to both basic and compensatory awards.
- The claimant found new employment at a higher salary but without a company car.
- The tribunal awarded £4,000 for loss of company car benefit.
Timeline
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Employment started
Claimant began employment with BLE Lighting and Power Ltd.
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Effective date of termination
Claimant's employment ended.
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Interim relief hearing
Employment Judge Deeley rejected the claimant's application for interim relief.
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New employment started
Claimant started a new job at a higher salary but without a company car.
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Remedy hearing
Employment Judge O'Neill, Ms J Lee, and Mr L Priestly determined the remedy award.
The legal issue
The tribunal had to determine the value of the lost company car benefit and apply the agreed 75% contributory fault deduction to both the basic and compensatory awards.
The outcome
The tribunal found that the claimant was unfairly dismissed and proceeded to a remedy hearing. The key dispute was the value of the lost company car benefit. The claimant had purchased a Vauxhall Astra for £4,000 to replace the company car, and the tribunal accepted this as a reasonable measure of loss, noting it was consistent with HMRC guidance on the car's value.
Compensation breakdown:
- Basic award: £408.00 (after 75% deduction)
- Compensatory award: £2,167.34 (including £4,000 car loss, £250 loss of statutory rights, £980.25 pension loss, all after 75% deduction)
- Total: £2,575.34
Lessons & takeaways
- If you lose a company car as part of an unfair dismissal, you can claim the cost of a replacement vehicle, even if you get a higher-paying job.
- The tribunal will use HMRC guidance or P11D values to assess the value of a lost company car benefit.
- A high contributory fault deduction (here 75%) can significantly reduce your compensation, so be prepared to address any conduct issues.
- Even with a short service of two years, you can still win an unfair dismissal claim and recover losses beyond basic pay.
A car benefit that made the difference
This case shows how non-salary perks like a company car can form a significant part of an unfair dismissal claim. The former employee, who had worked for BLE Lighting and Power Ltd for just under three years, was unfairly dismissed in December 2021. He quickly found a new job with a higher salary, but it did not offer a company car. To get to work, he bought a Vauxhall Astra for £4,000.
At the remedy hearing, the tribunal had to decide how much to award for the loss of the car. The employer argued that compensation should be based on the taxable value of the benefit, not the replacement cost. But the tribunal looked at the P11D form, which valued the car at about £150 per week, and concluded that £4,000 was a reasonable figure, especially given depreciation.
Why the award was reduced
A 75% contributory fault deduction had already been agreed, meaning the claimant's own conduct contributed to his dismissal. This reduced the basic award from £1,632 to £408, and the compensatory award from £8,669.36 to £2,167.34. The total compensation came to £2,575.34.
What this means for similar claims
If you lose a company car through unfair dismissal, you can claim the cost of a suitable replacement vehicle, even if you earn more in your new job. The tribunal will look at the car's value to you, not just the employer's cost. However, any contributory fault will reduce the award, so it is important to be honest about your own role in the dismissal.
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