Under the Unfair Dismissals Acts, an employee can be awarded up to two years' remuneration and this is based on an employee’s actual financial loss. Is that a Gross or Net loss and what Social Welfare payments be deducted in calculating the loss, if any?

Posted in : First Tuesday Q&A ROI on 4 December 2012 Issues covered:

Unfair dismissal awards are gross and subject to tax. Termination tax relief will usually apply to the gross sum. In arriving at their decision as to the quantum of the award, the EAT should take the employee’s efforts to mitigate his/her loss (including Social Welfare payments received) into account. The level of Social Welfare payments and income to the date of the EAT hearing would have an impact on the tax treatment of the award. Back to Q&A's This article is correct at 02/09/2015

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