Lone parent dismissed without notice. Ex-employer reluctantly paid 3 months pay in lieu of notice. Client claimed IS at the end of the pay in lieu of notice period, and is now in receipt of IS with mortgage interest and CTB. She has taken the ex-employer to an Employment Appeal Tribunal for unfair dismissal and has a hearing at the end of August. I am trying to figure out how any award would affect her IS/CTB position. So far as I can see from the DWP decision Makers Guide (15231/15232), compensation could comprise a basic amount for loss of the job and an amount for loss of earnings for a defined period. The basic amount would be treated as capital for IS, but the amount for loss of earnings would be taken as earnings spread over the period determined by the EAT, the period presumably starting at the end of the pay in lieu of notice period. This would take her out of IS/CTB from the start of the claim, so the DWP would revise the decision to award benefit back to the date of claim, creating an overpayment of all the IS/CTB paid. The method of recovery is that the Tribunal would reduce the award by the amount of benefit paid and the DWP would recover the overpayment from the ex-employer, not the claimant. The ex-employer would also deduct income tax from the award. Can anybody confirm whether I have understood this correctly please?

My client may be able to negotiate a compromise agreement, ie a settlement before the tribunal hearing. In this case my understanding of the DMG (15240, 15262/15263) is that the entire settlement would be treated as earnings spread over a number of weeks equal to the amount of the settlement divided by £380, this being the maximum weekly earnings to be used for calculating statutory redundancy payments. Again this period presumably starts from the end of the pay in lieu of notice period, would take my client out of IS/CTB entitlement from the start of the claim, and result in overpayment of all IS/CTB. Again, have I got it right? Would the ex-employer deduct income tax and benefit received, and pay the benefit to the DWP?

One of the possible grounds for the EAT appeal may be sex discrimination because there are family friendly working/child care issues. Would this make any difference?

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