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HMRC internal manual

National Insurance Manual

Class 1 NICs: Payments made under employment legislation: Unfair dismissal: Pay under an order for the continuation of a contract of employment: Assessment by employment tribunal of amount payable by the employer to the employee

Section 130 Employment Rights Act 1996

Section 164 Trade Union and Labour Relations (Consolidation) Act 1992

NIM07040  explains that where an employment tribunal (“ET”) (in Northern Ireland, an industrial tribunal) makes an order for the continuation of a contract ofemployment, the ET will also specify the amount that the employer must pay the employee by way of pay for each normal full or part pay period falling between:

  • the date of dismissal; and
  • the determination or settlement of the employee’s complaint.

The amount awarded by the ET will be the amount that the employee could reasonably have expected to earn during the period of the award. In determining that amount, the ET will:

  • calculate the amount as if the employee had not been dismissed; and
  • take into account any lump sum received by the employee on or after their dismissal which, wholly or partially:


  • represents payment in lieu of wages; but
  • is not referable to the employee’s normal pay period.

For details about the NICs treatment of payments made under an order for the continuation of a contract of employment, see NIM07042.