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. The median award for a claim for sex discrimination in 2012-13 was £5,900.

Claims can be brought against the individual employee who carried out the discrimination as well as their employer. The claimant can choose who 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. They are all equally liable for the whole amount (London Borough of Hackney v Sivanandan [2013] EWCA Civ 22).

If a claimant has left their job as a result of discrimination, compensation for loss of earnings will include actual financial loss plus an estimate of future loss. This is assessed in quite a “rough and ready” way, by taking the sum they would have earned if they had remained at work, net of tax and national insurance, and reducing this by a percentage to reflect contingencies, such as the possibility that they might have lost their job at a later date, for example through redundancy.

Compensation is normally awarded up to the point at which it is “at least possible” that a claimant is 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 claim damages for injury to feelings. The size of this award can reflect many factors, including the length of time the employer took to resolve the employee’s grievance (BT v Reid [2004] IRLR 327), the seniority of the person who has discriminated and how persistent and serious the discrimination has been.

There are three compensation bands for injury to feelings awards (Vento v Chief Constable of West Yorkshire Police [2003] IRLR 102, 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 85).

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 affect 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 have realised that the mistreatment was due to 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 [2009] UKEAT 0385/09/0911).

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. Conduct following the unlawful act, such as a failure to apologise, can also lead to this type of award. Aggravated damages, although meant to reflect exceptionally upsetting behaviour, are nevertheless supposed to compensate the victim, not punish the offender (Commissioner of Police of the Metropolis v Shaw [2011] UKEAT 0125/1/2911, Bungay v Saini and others [2011] UKEAT 0331/10/2709).

Tribunals can also award additional compensation for psychiatric injury. In MoD v Cannock [1994] IRLR 509, the EAT held that compensation could 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 the claimant 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 [2006] UKEAT 0536/05/1703, suggests that a tribunal cannot take into account the size of the employer’s organisation or resources.