As new principles come into force for calculating pension losses, our trainee solicitor, Kashif, explains the employment law implications.

An unfairly dismissed employee has enough to deal with. Losing a salary is hard enough – suffering pension losses, by losing employer and individual contributions, makes it even worse. The longer the employee can’t pay in, the smaller the pension pot when it comes to retirement. 

Claiming for loss of pension if you’ve been unfairly dismissed can be vital. Public sector workers can be hit the hardest, as their pension schemes are usually much more generous. Unfairly dismissed employees in the public sector may struggle to get a similar job in that sector. They often move into private sector roles, where the pension scheme can be far smaller, and so lose out. 

The new Tribunal’s Guidance on Compensating Pension Loss sets out handy guidance for calculating pension loss. This guidance provides certainty in calculating pension losses.  

Although the principles are not statutory, Employment Tribunals will use them to calculate pension loss for those claiming, and employment lawyers will use them to do the same for their clients. The principles should help accurately calculate the losses an unfairly dismissed employee will suffer. They also consider relevant information to calculate the pension loss under the new 2016 state pension system.  

The calculation of losses can be extremely complicated. Because of this, Tribunals often don’t do the calculations soon enough, so both sides often can’t assess losses and settle early on. Our employment team can advise on calculating any potential pension loss to help you speed this process up.