Any claimant who wins compensation for unfair dismissal will now have the amount reduced by any incapacity benefit they have claimed, following a ruling by the Employment Appeals Tribunal (EAT).
Previously tribunals would reduce the compensatory award by 50 per cent of any incapacity benefit already received by a claimant.
Daniel Barnet, a barrister at 1 Temple Gardens, said this meant that if losses of earnings were £10,000 and the claimant had received £2,000 in incapacity benefit, the award would be reduced by 50 per cent of £2,000, ie, to £9,000.
This rule has now been overturned in the case of Morgans v Alpha Plus Security, where the EAT held that tribunals must deduct the entire amount of incapacity benefit from the compensatory award.
Failing to do so would result in a wrongful windfall to the claimant, the EAT ruled.