Compensation

There is no upper limit for compensation in discrimination claims, and compensation can be claimed under a number of different headings.

Although compensation is unlimited, typical awards are not high. For example the median award for a claim for sex discrimination in 2011-12 was £6,746.

Claims can be brought against the individual perpetrator of the discrimination as well as the employing organisation. The claimant can choose which party to enforce the award against and usually this will be the party with the most assets. The tribunal has no power to apportion the award among discriminators, who are all equally liable for the whole amount (London Borough of Hackney v Sivanandan [2013] EWCA Civ 22).

If the claimant has left their job as a result of discrimination, compensation for loss of earnings will include any actual financial loss sustained, plus an estimate of future loss, assessed by taking the sum they would have earned at work (net of tax and national insurance contributions), deducting what might have been earned elsewhere and then reducing this by a percentage to reflect the possibility that they might have lost their job at a later date, for example because of redundancy.

Compensation is normally awarded up to the point at which it is “at least possible” that they are likely to find another job (Wardle v Credit Agricole Corporate and Investment Bank [2011] EWCA Civ 545). The fact that the employer “unintentionally” discriminated is not a defence.

Claimants can also claim damages for injury to feelings. The size of this award can reflect many factors including the length of time that the employer took to resolve the employee’s grievance (BT v Reid ([2004] IRLR 327)), the seniority of the person who has discriminated, how persistent and serious the discrimination has been.

There are three compensation bands for injury to feelings awards. These were established by the Court of Appeal in Vento v Chief Constable of West Yorkshire Police [2003] IRLR 102 and recently adjusted for inflation (Da’Bell v NSPCC UKEAT/0227/09):

Top band: £18,000 — £30,000: for the most serious cases (for example, a lengthy campaign of discriminatory harassment);

Middle band: £6,000 — £18,000: for serious cases which do not merit an award in the highest band;

Lower band: £500 — £6,000: for less serious cases (for example, where the act of discrimination is an isolated or one-off occurrence).

Awards above or below these limits should only be made in exceptional circumstances.

Awards for injury to feelings are not “grossed up” to take account of the claimant’s tax liability (Orthet v Vince-Cain ([2004] IRLR 857)).

In Essa v Laing ([2004] IRLR 313), the Court of Appeal held that an employer was still liable to pay compensation for injury to feelings even though it could not have been foreseen that the discrimination would have affected the employee’s health so badly. The Court held that there was a strict obligation on employers to pay compensation where health was damaged.

For compensation for injury to feelings to be awarded, it is not necessary for the claimant to be aware that the mistreatment was caused by discrimination. Clearly, if claimants do realise they have been discriminated against, it is likely to make them feel even worse (Taylor v XLN Telecom Ltd and others UKEAT/0385/09).

Tribunals can also award aggravated damages due to the exceptionally upsetting way a defendant carries out an unlawful act with a spiteful, vindictive or unthinking motives; and conduct following the unlawful act (such as a failure to apologise).

Tribunals can also award additional compensation for psychiatric injury, and in MoD v Cannock [1994] IRLR 509, the EAT held that compensation could also be claimed for hurt caused by loss of a chosen career.

Exceptionally, tribunals also award exemplary (punitive) damages — for example, where a public authority has behaved in an oppressive, arbitrary or unconstitutional way.

In determining compensation in harassment cases, tribunals will take account of the impact of harassment and how the employer responded to it. They may also take account of factors such as the victim’s age (for example, if s/he was a young person, or was particularly vulnerable), whether the employer’s attitudes had encouraged the harassment, and whether complaints were ignored.

The case of Corus Hotels v Woodward (EAT/0536/05), suggests that a tribunal cannot take into account the size of the employer’s organisation or resources.