Unfair dismissal after employer enters administration: compensation awarded

This case shows what can happen when an employer simply does not engage with tribunal proceedings. The former employee, who had worked for Greenbrow Social Club Ltd for five years, brought claims for unfair dismissal, notice pay, and holiday pay after being dismissed in November 2020. The employer failed to comply with tribunal orders and indicated it did not intend to defend the claim, leading to its response being struck out.

What the tribunal decided

With no defence from the employer, the tribunal assessed compensation based on the claimant's evidence. It accepted her gross weekly pay of £191.84 (based on a 22-hour week at the National Minimum Wage), rather than the lower furlough figure she had received. The tribunal calculated the basic award at 1.5 weeks' pay per year of service, giving £1,438.80.

For the compensatory award, the tribunal considered that the claimant's employment would have ended when the employer entered administration on 21 July 2021. It awarded loss of earnings for 32 weeks after the notice period, totalling £5,656.32. Notice pay of £959.20 and holiday pay of £702.13 were also awarded.

What the employer could have done differently

If the employer had engaged with the process, it could have potentially argued that the dismissal was fair or that the claimant's losses were limited. By failing to defend, it left the tribunal to decide based solely on the claimant's submissions.

Why this matters

This case highlights that tribunals will proceed without an employer's input if they fail to comply. It also shows how the administration of an employer can cap the period of lost earnings, as the tribunal assumed employment would have ended on that date in any event.