The Claimant was found to have been unfairly dismissed and the Respondent refused to comply with an order to reinstate him, thus triggering the entitlement to an additional award. The Claimant's financial losses from the date of termination to the date on which he should have been reinstated were calculated to be £67,469.78 (under s114(2) ERA). The statutory compensation cap (i.e. in this case 52 weeks gross annual pay) was £63,532.81. The additional award of 52 weeks pay (capped at the then weekly pay limit of £525) was calculated as £27,300. The ET awarded the Claimant a basic award (which was not disputed), the additional award (again not disputed) plus an uncapped compensatory award of £67,469.78. The Respondent appealed on the basis that the compensatory award should have been capped at £63,532.81 because the combined total of the additional award and uncapped compensatory award exceeded the financial losses of £67,469.78 so therefore, pursuant to section 124(1) and (1AZ) ERA, allowed under section 124(4) ERA, it was not “necessary” to ensure that the aggregate of that award and the additional award fully reflected the sum payable under section 114(2).

The EAT allowed the appeal. In the present case, aggregating the compensatory award with the additional award produced a total sum of £90,832.81, which was considerably in excess of the amount that would have been payable pursuant to section 114(2) ERA. In the circumstances, the adjustment to the statutory cap on the compensatory award (in this case, one year’s pay (£63,532.81), pursuant to section 124(1) and (1AZ) ERA), allowed under section 124(4) ERA, was not “necessary” to ensure that the aggregate of that award and the additional award fully reflected the sum payable under section 114(2). The appeal was therefore allowed and the ET’s compensatory award of £67,469.78 set aside and substituted by a compensatory award of £63,532.81.