Discrimination compensation guide 2006: The law
The EOR Guide to Compensation in Discrimination Cases 2006 provides a comprehensive explanation of the legal principles that apply to the assessment of compensation.
The legal rules for awarding compensation in discrimination cases are found in the various statutory provisions applying to each strand of discrimination.
The application of these rules has been clarified in a number of appeal court and Employment Appeal Tribunal decisions, establishing some important legally binding principles that employment tribunals must apply when assessing compensation. In this section, Hilary Slater, a consultant with Cobbetts solicitors and a regular contributor to Equal Opportunities Review, explains how those principles are to be applied.
The statutory provisions
The remedies for unlawful discrimination, including the power for tribunals to make an order requiring the respondent to pay compensation to the complainant, are set out in the following statutory provisions:
s.65 Sex Discrimination Act 1975;
s.56 Race Relations Act 1976;
s.17A Disability Discrimination Act 1995;
reg. 30 Employment Equality (Religion or Belief) Regulations 2003;
reg. 30 Employment Equality (Sexual Orientation) Regulations 2003; and
reg. 38 Employment Equality (Age) Regulations 2006.
Financial loss
The tribunal should award financial loss that the claimant proves, on a balance of probabilities, has been caused by the act of discrimination. This loss may include:
loss of earnings;
loss of pension benefits;
loss of other benefits (contractual and non-contractual), eg private health insurance, use of a company car;
job-hunting expenses;
counselling fees; and
other expenses caused by the act of discrimination, eg retraining.
Loss should be calculated on a net basis; that is, what the claimant would have received after deductions for tax and national insurance: British Transport Commission v Gourley [1956] AC 185 HL.
The value of benefits should be assessed as the cost to the claimant of replacing the benefit.
Change of career
A decision to retrain in a different field may not necessarily break the chain of causation (ie the link between the discriminatory act and the loss suffered) and the respondent may be liable for loss of earnings and expenses during the period of retraining. A decision to become self-employed may also not break the chain of causation. The question will be whether the decision to change careers or become self-employed is a reasonable step in the circumstances.
In ICTS (UK) Ltd v Tchoula [2000] IRLR 643, the EAT held that the tribunal was entitled to find that it was reasonable for a security officer who had been dismissed in an act of victimisation to retrain in a different field, even though this resulted in his being compensated for being out of employment for more than two years. The tribunal was entitled to accept the claimant's evidence that he did not pursue work in the security field because his dismissal meant he no longer had the clean record required to do so.
In Orthet Ltd v Vince-Cain [2004] IRLR 857, the EAT held that the tribunal was entitled to award compensation for loss of earnings for a four-year period of retraining at university. The employer was unable to prove there was suitable work the claimant could and should have taken and the tribunal found, if such work became available, the claimant would abandon her course.
Causation
A subsequent act of unfair dismissal by an employer does not break the chain of causation where an earlier act of unlawful discrimination has an impact on the claimant's ability to work beyond the date of dismissal: HM Prison Service v Beart (No.2) [2005] IRLR 568 CA.
Mitigation
A claimant is under a duty to take reasonable steps to mitigate his or her loss. The burden is on the respondent to prove that there has been a breach of this duty. If a tribunal finds that a claimant has failed to mitigate his or her loss, the tribunal will award compensation only for the loss the claimant would have suffered if they had taken reasonable steps to mitigate their loss. If a claimant has suffered psychiatric illness or severe loss of confidence as a result of the act of discrimination, it may be reasonable for the claimant not to seek work during a period of recovery.
Where a dismissed employee reasonably attempts to mitigate his loss by setting up in business, the tribunal should assess financial loss by first calculating loss of remuneration, then adding any costs reasonably incurred in mitigating loss and, from that, deducting earnings from the new business: AON Training Ltd v Dore [2005] IRLR 891 CA.
Deductions
A claimant's new earnings will be taken into account in calculating financial loss. Whether or not state benefits should be taken into account in calculating loss may depend on the type of benefit and whether the amount of benefit would be recalculated to take account of a tribunal award. The Employment Protection (Recoupment of Jobseeker's Allowance and Income Support) Regulations 1996, which apply to unfair dismissal and certain other awards, do not apply to discrimination compensation. The basic principle is that the claimant should be put in the position they would have been in, but for the discriminatory act. If receipt of a loss of earnings award would reduce entitlement to a benefit for a period to which the award relates then, arguably, the tribunal has no need to deduct that benefit in calculating loss because the claimant will not, after recalculation of benefits, end up with more than their loss of earnings. However, the EAT in Chief Constable of West Yorkshire Police v Vento (No.2) [2002] IRLR 177 held that a tribunal did not err in deducting from an award of compensation income support paid in respect of a claimant's children and mortgage interest.
There is conflicting authority on whether part or the whole of incapacity benefit should be deducted in calculating compensation. The most recent authority (dealing with an unfair dismissal compensatory award) held that the full amount of receipts from a third party should be deducted: Morgans v Alpha Plus Security Ltd [2005] IRLR 234. In Chan v Hackney London Borough Council [1997] IRLR 1014, the EAT held that a tribunal was right to deduct invalidity benefit from an award for loss of earnings.
In Atos Origin IT Services UK Ltd v Haddock [2005] IRLR 20, the EAT held that payments from an accident or health insurance policy for which the premiums had been paid by the employer, without contribution from the employee, should be deducted in calculating an award of financial loss under the Disability Discrimination Act 1995. The EAT said the same approach applied as in personal injury cases: a claimant cannot recover damages in respect of loss that will be avoided, other than payments resulting from the benevolence of third parties and from an insurance policy for which a claimant has paid or contributed to the premiums.
Other events
In calculating loss, a tribunal may need to assess the chances of certain events happening - for example the chance that the claimant would have obtained a promotion and received higher pay had they remained in the employment of the respondent, or the chance that the claimant would have remained with the respondent until retirement. A tribunal should assess aspects of loss by application of a percentage, reflecting the likelihood of an event, rather than on an all-or-nothing basis.
In Ministry of Defence v Wheeler [1998] IRLR 23 CA, in calculating the loss of claimants who were dismissed for pregnancy after working several years of a 22-year engagement, it was necessary for the tribunal to consider the chance that they would otherwise have returned to work with the MoD after maternity leave, the chance that they would have completed their engagement, and the chance that they would find alternative employment at the same rate of pay in the future.
Future loss
A tribunal will calculate separately financial loss up to the date of the hearing and any likely future loss. Assessment of future loss is, inevitably, a highly speculative exercise. If the future loss is for a lengthy period, some deduction may be required to take account of the benefit of receiving the money early, as it may be invested and earn income. Tribunals may take accelerated receipt into account in different ways.
They may choose to apply the annual rate of discount used in personal injury cases, which is currently 2.5%.
Where career-long loss is established, tribunals may use the Ogden tables (government actuarial tables used in personal injury cases - available at www.gad.gov.uk/Other_Services/Compensation_for_injury_and_death.htm) to calculate future loss of earnings, but this use will be rare: Kingston upon Hull City Council v Dunnachie (No.3) [2003] IRLR 843. The Ogden tables provide a multiplier to be used for calculating future loss of earnings to retirement, making provision for accelerated payment and taking into account the chance that the claimant may die before retirement age or live beyond it. Other contingencies, such as the possibility that the claimant would have ceased working due to ill health, would have to be taken into account by means of a separate discount.
Pension loss
There are guidelines to assist tribunals in calculating pension loss. Compensation for loss of pension rights (third edition) is written by tribunal chairs David Sneath and Colin Sara, the government actuary and a member of the Government Actuary's Department. Tribunals do not have to use these guidelines but they are likely to do so unless presented with expert or other evidence that suggests loss should be calculated in a different way in a particular case.
The guidelines suggest two approaches to the calculation of pension loss: the simplified approach and the substantial-loss approach.
Where the lost pension is a money-purchase scheme, the simplified approach will be used.
Where the lost pension is a final-salary scheme, the simplified or the substantial-loss approach may be used, depending on the period of loss. The simplified approach will be applicable where there is a relatively short period of continuing pension loss. The substantial-loss approach will be used where there is longer-term, or whole-career, loss.
The simplified approach involves consideration of three stages:
1. In the case of final-salary schemes only, the loss of the enhancement to the pension already accrued because of the increase of salary that would have occurred if the claimant had not been dismissed;
2. In all cases, the loss of rights accruing up to the hearing; and
3. In all cases, the loss of future pension rights.
Stage one involves an actuarial calculation to assess the difference between the deferred pension the claimant will actually receive and the one they would have received had they not been dismissed, allowing for contingencies. For stages two and three, in general, loss is calculated as being the amount of pension contributions the employer would have made in the relevant period.
The substantial-loss approach uses actuarial tables to assess the current capitalised value of the pension rights that would have accrued up to retirement.
An employment tribunal is not bound to adopt either the simplified or substantial-loss approach, if it concludes in the particular circumstances that those approaches would produce an incorrect or inappropriate answer. However, it is important for an employment tribunal to explain the approach it has adopted, and why that particular approach has been used: Greenhoff v Barnsley Metropolitan Borough Council (31 May 2006; appeal no.UKEAT/0093/06). In that case, the EAT recognised "the great difficulties for tribunals in ascertaining the value of the loss of pension rights". It therefore set out some guidance that, although not mandatory, would assist tribunals in assessing pension loss:
"(a) identifying all possible benefits that the employee could obtain under the pension scheme;
(b) setting out the terms of the pension relevant to each possible benefit;
(c) considering in respect of each such possible benefit first the advantages and disadvantages of applying what we have described as 'the simplified approach' or 'the substantial-loss approach' and also any other approach that might be considered appropriate by the tribunal or by the parties;
(d) explaining why they have adopted a particular approach and rejected any other possible approach; and
(e) setting out their conclusions and explaining the compensation they have arrived at in respect of each head of claim so that the parties and this appeal tribunal can then ascertain if they had made an error."
Injury to feelings
All of the equality legislation contains provisions to the effect that damages for discrimination may include compensation for injury to feelings whether or not they include compensation under any other head.
The leading authority on injury to feelings is now the Court of Appeal decision in Vento v Chief Constable of West Yorkshire Police (No.2) [2003] IRLR 102. The Court of Appeal approved the summary of the general principles on compensation for injury to feelings in Armitage, Marsden and HM Prison Service v Johnson [1997] IRLR 162, which are as follows:
Awards for injury to feelings are compensatory. Such an award should be just to both parties. It should compensate fully without punishing the respondent. Feelings of indignation at the employer's conduct should not be allowed to inflate the award.
Awards should not be too low because that would diminish respect for the policy of the anti-discrimination legislation. Society has condemned discrimination and awards must ensure that it is seen to be wrong. On the other hand, awards should be restrained, as excessive awards could be seen as the way to "untaxed riches".
Awards should bear some broad general similarity to the range of awards in personal injury cases, using the whole range of such awards.
In exercising their discretion in assessing a sum, tribunals should remind themselves of the value in everyday life of the sum they have in mind. This may be done by reference to purchasing power or by reference to earnings.
Tribunals should bear in mind the need for public respect for the level of awards made.
The Court of Appeal in Vento identified three broad bands of compensation for injury to feelings, which was distinguished from compensation for psychiatric or similar personal injury.
The top band is normally between £15,000 and £25,000. Sums in this range should be awarded in the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment. Only in the most exceptional cases should an award of compensation for injury to feelings exceed £25,000.
The middle band is between £5,000 and £15,000. This should be used for serious cases that do not merit an award in the highest band.
The lower band is between £500 and £5,000. This is for less serious cases, such as where the act of discrimination is an isolated or one-off occurrence. In general, awards of less than £500 are to be avoided altogether because they risk being regarded as so low as not to be a proper recognition of injury to feelings.
The Court of Appeal said tribunals have considerable flexibility within each band to fix what is considered to be fair, reasonable and just compensation in the particular circumstances of the case. Regard should be had to the overall magnitude of the sum total of the awards of compensation for non-pecuniary loss made under the various headings of injury to feelings, psychiatric damage and aggravated damage. Double recovery should be avoided by taking appropriate account of the overlap between the individual heads of damage. The extent of overlap will depend on the facts of each particular case.
In Greig v Initial Security Ltd EATS/0036/05 the EAT upheld an award of £500 for injury to feelings in a disability discrimination recruitment case where the tribunal had found the claimant's job application to be not wholly in good faith. The EAT dismissed an argument that £750 is the award due in respect of the very slightest injury to feelings.
The EAT in Voith Turbo Ltd v Stowe [2005] IRLR 228 said that injury to feelings caused by dismissal on grounds of race correctly fell into the middle band in Vento; dismissal on grounds of race discrimination is a very serious incident and cannot be described as one-off or isolated.
The injury to feelings must have resulted from the knowledge of discrimination: Coleman v Skyrail Oceanic Ltd [1981] IRLR 398 and Alexander v The Home Office [1988] IRLR 190.
The claimant must provide evidence of the injury suffered. The EAT said in MoD v Cannock and others [1994] IRLR 509: "Injury must be proved. It will often be easy to prove, in the sense that no [employment tribunal] will take much persuasion that the anger, distress and affront caused by the act of discrimination has injured the claimant's feelings. But it is not invariably so."
An admission of discrimination by the respondent may reduce the injury suffered: Orlando v Didcot Power Station Sports & Social Club [1996] IRLR 262 EAT. Conversely, a respondent may increase the injury suffered by the way its defence is conducted.
The size of a respondent organisation should not be taken into account in determining the level of the award: Corus Hotels v (1) Woodward (2) Rushton EAT/0536/05.
Concern at the "complete failure" of a respondent's equal opportunities policy does not properly form part of a compensatory award for injury to feelings: Corus Hotels v (1) Woodward (2) Rushton EAT/0536/05.
Personal injury
Employment tribunals can award compensation for personal injury caused by unlawful discrimination: Sheriff v Klyne Tugs (Lowestoft) Ltd [1999] IRLR 481. The personal injury could be physical and/or psychiatric. The extent of the injury does not have to be foreseen for the employer to be liable. In Essa v Laing Ltd [2004] IRLR 313 CA the Court of Appeal held that, in a racial abuse case, a claimant need establish only a causal link between the discriminatory act and the injury suffered, with no need to show that the injury was reasonably foreseeable.
Although injury to feelings and psychiatric injury are two separate heads of compensation, there is often an overlap between the two. In HM Prison Service v Salmon [2001] IRLR 452, the EAT recognised that, in principle, injury to feelings and psychiatric injury are distinct. In practice, however, the two types of injury are not always easily separable, giving rise to a risk of double recovery. It is not always possible to identify when the distress and humiliation that may be inflicted on the claimant becomes a recognisable psychiatric illness such as depression. Injury to feelings can cover a very wide range. At the lower end are comparatively minor instances of upset or distress, typically caused by one-off acts or episodes of discrimination. At the upper end, the victim is likely to be suffering from serious and prolonged feelings of humiliation, low self-esteem and depression. In these cases, it may be fairly arbitrary whether or not the symptoms are put before the tribunal as psychiatric illness, which is supported by a formal diagnosis or expert evidence.
Employment tribunals will often refer to the Judicial Studies Board's Guidelines for the assessment of general damages in personal injury cases, (7th edition, published by Oxford University Press, www.oup.com) to help them determine the appropriate award for injury to health. They suggest different levels of award according to the type of illness and specified factors. The guidelines list the factors to be taken into account when valuing such claims, as follows:
(i) the injured person's ability to cope with life and work;
(ii) the effect on the injured person's relationships with family, friends and those with whom he or she comes into contact;
(iii) the extent to which treatment would be successful;
(iv) future vulnerability;
(v) prognosis;
(vi) whether medical help has been sought;
(vii) (a) whether the injury results from sexual and/or physical abuse and/or breach of trust; (b) if so, the nature of the relationship between the victim and the abuser, the nature of the abuse, its duration and the symptoms caused by it.
If an act of discrimination may have resulted in injury to health, any discrimination claim in the employment tribunal should specifically include the claim for injury to health. A later claim in another court for personal injury arising from the same facts may be struck out for abuse of process, or on the basis of the public policy principle, that claims that have been or could have been litigated in one forum should not be allowed to be litigated in another.
Aggravated damages
The courts have taken different views over recent years as to whether a separate award should be made for aggravated damages or whether such damages should be included in the award for injury to feelings. The most recent view, taken by the Court of Appeal in Scott v Commissioners of Inland Revenue [2004] IRLR 713 is that tribunals may make separate awards for injury to feelings and aggravated damages. In practice, tribunals often include aggravated damages as part of the injury to feelings award without specifying a separate amount.
Aggravated damages may be awarded where the employer has behaved in a "high-handed, malicious, insulting or oppressive" manner in committing the act of discrimination: Alexander v the Home Office [1988] IRLR 190.
The way a respondent has acted after discrimination has been claimed may be taken into account in making an award of aggravated damages. In British Telecommunications plc v Reid [2004] IRLR 327 CA an award was made where the employer had promoted an alleged perpetrator of discrimination or harassment while the grievance against him was still being investigated.
Aggravated damages may be awarded because of the way a respondent conducts proceedings, including conduct at the hearing, although such awards will be exceptional: City of Bradford Council v Arora [1989] ICR 443 and Zaiwalla & Co v Walia [2002] IRLR 697 EAT.
Aggravated damages are compensatory in nature rather than punitive. The claimant must prove that they suffered greater injury as a result of the respondent's conduct. The claimant must know, or have some suspicion, of the improper conduct or motive of the employer, for aggravated damages to be awarded: Ministry of Defence v Meredith [1995] IRLR 539 EAT.
Exemplary damages
These are damages designed to punish the wrongdoer rather than to compensate the claimant for loss suffered as a result of the wrong.
There was authority that exemplary damages could not be awarded in discrimination cases: Deane v The London Borough of Ealing [1993] IRLR 209 EAT. However, the House of Lords decision in Kuddus v Chief Constable of Leicestershire Constabulary [2001] (3 All ER 193), although not a discrimination case itself, has undermined the basis of the reasoning in the earlier authority and opened up the possibility of exemplary damages being awarded in appropriate discrimination cases. EOR is not aware of any awards of exemplary damages being made in discrimination cases. However, the EAT in Virgo Fidelis Senior School v Boyle [2004] IRLR 268, has said there is no reason in principle why exemplary damages should not be awarded in discrimination cases if the conditions in Rookes v Barnard [1964] AC 1129 HL are met. These conditions are that:
there was oppressive, arbitrary or unconstitutional action by the servants of the government; or
the respondent's conduct was calculated by him to make a profit for himself.
Awards of exemplary damages in discrimination cases are likely to be very rare.
Compensation for indirect discrimination
A tribunal may award compensation for indirect discrimination on grounds of sex, sexual orientation, age, religion or belief and race discrimination which relates to race or ethnic or national origins, whether the discrimination was intentional or unintentional. A tribunal cannot award compensation for indirect race discrimination relating to colour or nationality if the respondent proves that the requirement or condition in question was not applied with the intention of treating the claimant less favourably on racial grounds: s.57(3) of the Race Relations Act 1976.
The EAT in JH Walker Ltd v Hussain [1996] IRLR 11 held that "intention" will include the situation where the employer imposes a condition wanting to bring about the state of affairs that constitutes the prohibited result of unfavourable treatment on racial grounds and knows that the prohibited result will follow the imposition of the condition. In that case, the employer knew that the application of a rule not allowing holidays to be taken over a period that included Eid would adversely affect Muslim employees, and the tribunal was entitled to infer that the employer wanted to bring about the unfavourable treatment.
Awards against individual respondents
Where there is more than one respondent held liable, the tribunal will normally apportion liability between the respondents, usually the employer and the individual responsible for the discrimination, and make separate awards against them. The tribunal may, if it considers it necessary to do so, make a joint and several award of compensation against the respondents (so the amount can be enforced by the claimant against one respondent only or part against one and part against the other): (1) Peter Way (2) Intro Cate Chemicals Ltd v Crouch [2005] IRLR 603 EAT.
A respondent who has been held jointly and severally liable with another respondent can seek a contribution from the other respondent equal to a percentage set by the tribunal "having regard to the extent of that person's responsibility for the damage in question". The right of one respondent held jointly and severally liable to seek a contribution from the other does not affect the ability of the claimant to enforce the full award against one respondent.
A tribunal may not make a joint and several award on the basis of the relative financial resources of the respondents.
The Court of Appeal in Miles v Gilbank [2006] EWCA Civ 543 upheld a joint and several award of £25,000 for injury to feelings against the director and majority shareholder of a hairdressing salon, who was the claimant's line manager, and the company employing the claimant.
Statutory dispute resolution procedures
Claimants wishing to bring discrimination and equal pay claims - other than claims arising from actual, rather than constructive dismissal - must normally comply with step one of the statutory grievance procedure, ie send a written grievance to their employer, and wait at least 28 days before presenting their claim to an employment tribunal. The tribunal will reject the claim if it is apparent that this has not been done. If it is not apparent on the face of the claim form that this has not been done, the claim may be accepted, but, if it later becomes apparent that the requirements have not been met, a tribunal will have no jurisdiction to deal with the claim and the claim will be dismissed.
If either the claimant or the respondent is at fault in failing to complete an applicable statutory procedure, the tribunal must adjust any compensation in accordance with s.31 of the Employment Act 2002. The statutory grievance procedure will normally apply to any claim of discrimination or for equal pay, other than a claim arising out of an actual dismissal. The statutory grievance procedure must be used where the claimant is claiming to have been constructively dismissed. If the claim arises from an actual dismissal, the employer should have used the statutory dismissal procedure. Completion of the relevant statutory procedure includes making use of the right to appeal.
If the claimant is at fault in failing to complete an applicable statutory procedure, the tribunal must reduce any award of compensation by 10% and may, if it considers it just and equitable in all the circumstances, reduce the award by up to 50%. If the respondent is at fault in failing to complete an applicable statutory procedure, the tribunal must increase any award by 10% and may, if it considers it just and equitable in all the circumstances, increase the award by up to 50%. Only if there are exceptional circumstances that would render a 10% adjustment unjust or inequitable, may the tribunal make such lesser, or no, adjustment as it considers just and equitable in all the circumstances.
Taxation of awards
Tribunals should consider whether part or all of an award is likely to be taxable and "gross up" any part calculated on a net basis which is likely to be subject to tax so that the claimant receives, after deduction of tax, the intended amount of award.
The EAT in Orthet Ltd v Vince-Cain [2004] IRLR 857 has said that all the factors point to awards for injury to feelings not being taxable, and therefore should not be grossed-up.
If the tax treatment of an award is different in practice from that anticipated by the employment tribunal, either party could seek a review of the tribunal's decision.
Interest
Interest may be awarded on discrimination awards for past financial loss and injury to feelings and on Equal Pay Act awards for arrears of remuneration or damages under the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996. Interest is not awardable on future loss. Tribunals are required to consider whether or not to award interest, without the need for any application by a party. If a tribunal decides not to award interest, it must include its reasons for not doing so in its written reasons.
Since 1 February 2002, the interest rate prescribed for England and Wales and Scotland has been 6%. Interest on awards for past financial loss or equal pay arrears will normally run for the period from the midpoint between the act of discrimination or contravention and the day on which the tribunal calculates compensation until the calculation date. Interest on injury to feelings will normally run for the period from the act of discrimination until the calculation date.
Where tax and national insurance contributions are to be deducted from an award, interest should be calculated on the net sum after deductions, rather than on the gross sum: Bentwood Bros (Manchester) Ltd v Shepherd [2003] IRLR 364 CA.
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The same approach to compensation is taken under the Sex Discrimination Act 1975 (SDA), the Race Relations Act 1976 (RRA), the Disability Discrimination Act 1995 (DDA), the Employment Equality (Sexual Orientation) Regulations 2003 (the sexual orientation Regulations), the Employment Equality (Religion or Belief) Regulations 2003 (the religion or belief Regulations), and the Employment Equality (Age) Regulations 2006 (the age Regulations), which come into force in October 2006. However, the rules on compensation for indirect discrimination on the grounds of colour and nationality differ from those relating to indirect discrimination on other grounds.
Compensation will be awarded where a tribunal considers it "just and equitable" to make an award.
When the tribunal has decided to make an award, it cannot then use its own view of what is just and equitable to determine the amount to be paid: Hurley v Mustoe (No.2) [1983] ICR 422 EAT.
Compensation must be calculated as damages would be calculated for any claim in tort or, in Scotland, breach of statutory duty. The aim is to put the claimant in the position they would have been in had the act of discrimination not occurred: Ministry of Defence v Cannock [1994] IRLR 509 EAT. Compensation is to compensate for loss suffered, with the possible exception of exemplary damages.
The loss must have been caused by the act of discrimination. If there are a number of causes for the loss, the tribunal will need to assess the extent of loss attributable to the act of discrimination. For example, in a case where personal difficulties unrelated to the act of discrimination contribute to a claimant's inability to seek work for a period or contribute to psychiatric illness, the tribunal may award a percentage of the loss.
The particular type of loss or damage suffered does not have to have been reasonably foreseeable: Essa v Laing Ltd [2004] IRLR 313 CA.
A claimant should be compensated fully for all loss suffered as a result of the act of discrimination: Marshall v Southampton and South West Area Health Authority (No.2) [1993] IRLR 445 ECJ. There is no statutory limit on compensation for acts of unlawful discrimination.
Heads of loss in discrimination cases may include:
- financial loss; - injury to feelings (awardable whether or not any other compensation is awarded); - personal injury; - aggravated damages; and - exemplary damages. A claimant must not be compensated for the same loss twice so, where the claimant has more than one type of claim, such as unfair dismissal and discrimination, the tribunal must be clear as to what loss is being awarded under which legislation.
Where the claimant has succeeded in unfair dismissal and unlawful discrimination and financial loss exceeds the maximum that can be awarded for unfair dismissal, the award should be made under the discrimination legislation so that the claimant is compensated in full for their loss: D'Souza v London Borough of Lambeth [1997] IRLR 677 EAT.
If a tribunal has made a recommendation and the respondent has failed to comply with the recommendation, the tribunal may increase the amount of compensation awarded or, if no award had been made, make an award.
Failure to comply in full with an applicable statutory dispute resolution procedure will normally lead to compensation being increased or decreased by between 10% and 50%, depending on who was at fault in not completing the procedure. Claimants who do not submit a step-one grievance letter, in cases where the statutory grievance procedure applies, will not be able to pursue a claim in the employment tribunal.
Tribunals should "gross up" any parts of the award that will be taxable in determining the amount of the award so that the claimant receives the full net compensation, after deduction of tax.
Interest is payable on awards for past financial loss and injury to feelings.
Where there is more than one respondent held liable for unlawful discrimination, the tribunal will normally make separate awards against them but it may, alternatively, make a joint and several award of compensation against the respondents.
The EAT will interfere with a tribunal's award of compensation only if the tribunal has made an error of law or reached a decision which no reasonable tribunal could reach on the evidence. |
