Remedies for unlawful discrimination

In practice, an award of compensation is the remedy which is most frequently sought and granted.

The words "just and equitable" extend only to the selection of the remedy or remedies to be granted by the tribunal, and they do not cover the assessment of an award of compensation (as to which, see below) if that is the remedy which the tribunal has chosen (Hurley v Mustoe (No.2)). In addition, the three remedies are the only ones which tribunals have power to grant under the SDA (MoD v Jeremiah) and, by analogy, the RRA and the FE(NI)A as well. Consequently, tribunals have no power to order the employer to appoint, promote, reinstate or re-engage the complainant in unlawful discrimination cases.

Impact of Community law

The Equal Treatment Directive (No.76/207/EEC) (the Directive) prohibits discrimination on grounds of sex in the conditions for recruitment, promotion and vocational training and in working conditions, including the conditions governing dismissal. Article 6 of the Directive obliges Member States to enact "such measures as are necessary to enable all persons who consider themselves [victims of discrimination prohibited by the Directive] to pursue their claims by judicial process".

The European Court of Justice (ECJ), in Marshall v Southampton and South-West Hampshire Area Health Authority (No.2), held that this obligation implied that "the measures in question should be sufficiently effective to achieve the objective of the Directive and should be capable of being effectively relied on by the persons concerned before national courts." That objective, according to the ECJ, is "to arrive at real equality of opportunity", and it "cannot therefore be attained in the absence of measures appropriate to restore such equality when it has not been observed". Put another way, those "measures" (meaning sanctions or remedies) must "guarantee real and effective judicial protection" and "have a real deterrent effect on the employer".

The ECJ went on to rule that a victim of discrimination prohibited by the Directive was entitled to rely on Article 6 of the Directive as against an employer in the public sector to set aside s.65(2) of the SDA. That provision, which has since been repealed (see below), imposed an upper limit on awards of compensation under the SDA. The ECJ also ruled that Article 6 required such compensation to include an award of interest (see below). It follows that anyone working or applying for a job in the public sector who is discriminated against contrary to the Directive may rely directly on Article 6 before an industrial tribunal, as against the public body concerned, in one of two ways. Firstly, to set aside any other provisions of the SDA to do with remedies which fail to attain the Directive's objective. Secondly, to secure remedies which do attain that objective but which are not available under domestic sex discrimination legislation.

As we point out below, it is arguable that all of the remedies currently available under the SDA still fall short of attaining the Directive's objective in certain respects. While this is of no immediate concern or interest to employers or to persons working or applying for jobs in the private sector, they would do well to take note of the Government's response to the Marshall (No.2) judgment. This was to bring the RRA and the FE(NI)A as well as the SDA into line with the ECJ's interpretation of the Directive. The chances are, therefore, that any future successful challenge along the lines of the Marshall (No.2) case will elicit a similar response from the Government.

Declarations

A declaration is, more accurately, "an order declaring the rights of the complainant and the [employer] in relation to the act to which the complaint relates" (s.65(1)(a) of the SDA; s.56(1)(a) of the RRA; s.26(1)(a) of the FE(NI)A). This is simply a statement that the employer has unlawfully discriminated against the complainant. It does not compel the employer to do anything, and it gives the complainant only the satisfaction of knowing that he or she has been vindicated by the tribunal. Of itself, therefore, a declaration is of limited value. It also fails to attain the objective of the Directive as stated by the ECJ in Marshall (No.2) (see above). In this regard, one industrial tribunal has said that "deterrent" means "discouragement or hindrance" and it could not see how a declaration could be either (Tickle v Governors of Riverview CF School and Surrey County Council).

In practice, however, a declaration is usually accompanied by at least one of the other two available remedies. As we explain below, compensation for "injury to feelings" is normally awarded even if the complainant has not lost out financially as a result of the unlawful discrimination. If, however, such an award is not appropriate because, for example, the complainant was not conscious of the unlawful discrimination (and a recommendation is not appropriate because, for example, the complainant is working for another employer), then the tribunal will have no alternative but to grant a declaration alone.

With a view to applying to a court for an injunction or, in Scotland, an order restraining persistent unlawful sex, marital or racial discrimination by an employer, the Equal Opportunities Commission or the Commission for Racial Equality, as the case may be, may complain to an industrial tribunal that the employer has unlawfully discriminated against a particular person. Where the tribunal upholds the complaint, it may make a declaration or a recommendation, or both, as if that person had presented the complaint (s.73(1) of the SDA; s.64(1) of the RRA).

Compensation

As we have mentioned, the ECJ in Marshall (No.2) ruled that it was contrary to Article 6 of the Directive for the SDA to impose an upper limit on the amount of compensation recoverable by a victim of discrimination prohibited by the Directive. "Where financial compensation is the measure adopted in order to achieve the [Directive's] objective" (see above), said the ECJ, "it must be adequate, in that it must enable the loss and damage actually sustained as a result of the discriminatory dismissal [or other circumstance] to be made good in full in accordance with the applicable national rules."

In order to give effect to this ruling, the upper limit laid down by the SDA, which had stood at £11,000, was abolished by reg. 2 of the Sex Discrimination and Equal Pay (Remedies) Regulations 1993 (1993 SI No.2798). This means that any award of compensation under the SDA made after 22 November 1993, when those Regulations came into operation, is not subject to any upper limit, even if the discrimination complained of took place when such a limit still applied (Harvey v Institute of the Motor Industry (No.2)).

In Northern Ireland, the upper limit on compensation for unlawful sex and marital discrimination was abolished by the Sex Discrimination and Equal Pay (Remedies) Regulations (Northern Ireland) 1993 (1993 SR No.478) with effect from 17 December 1993.

The RRA and the FE(NI)A have since been brought into line with the SDA. The ceilings on awards of compensation laid down by those Acts, which were £11,000 and £35,000 respectively, were removed by the Race Relations (Remedies) Act 1994 and the Fair Employment (Amendment) (Northern Ireland) Order 1995 (1995 SI No.758 (NI4)). By analogy with the SDA, this means that any award of compensation under the RRA or the FE(NI)A made after 3 July 1994 or 16 May 1995 respectively, when the Act and the Order came into force, may not be capped even if the discrimination complained of happened before that commencement date.

The upshot is that any victim of unlawful discrimination, whether he or she was working or applying for a job in the public sector or in the private sector, is now entitled to be compensated in full for the loss and damage found to have been sustained by him or her as a result of the discrimination.

Unintentional indirect discrimination

Where a tribunal makes a finding of unlawful indirect discrimination, it may not make an award of compensation if the employer proves that it applied the discriminatory requirement or condition without intending to treat the complainant unfavourably on any of the applicable prohibited grounds (s.66(3) of the SDA; s.57(3) of the RRA; s.26(2) of the FE(NI)A). In this context, the tribunal must look at the subjective intention of the employer (Orphanos v Queen Mary College).

The existence of these statutory exclusions has meant that, in practice, very few victims of unlawful indirect discrimination have been awarded compensation. Recently, however, at least two industrial tribunals have concluded that the exclusion in the SDA (s.66(3)), and the absence of any "effective" or "practicable" alternative remedy, fail to attain the Directive's objective as stated by the ECJ in Marshall (No.2) (see above) (Mulligan v Eastern Health & Social Services Board; Tickle v Governors of Riverview CF School and Surrey County Council). Consequently, the tribunals awarded compensation under Article 6 of the Directive to the complainants, both of whom worked in the public sector. As yet, however, the Government has not introduced legislation to remove the exclusion in the SDA or, indeed, those in the RRA and the FE(NI)A.

Despite that, the recent decision of the EAT in London Underground Ltd v Edwards (reported fully on pp.13-14 of this issue) potentially broadens the scope for tribunals to award compensation for unlawful indirect discrimination. The EAT held that the relevant question under s.66(3) of the SDA - and, by analogy, under s.57(3) of the RRA and s.26(2) of the FE(NI)A as well - related to the intention with which the discriminatory requirement or condition was applied, rather than to the more generalised intention relating to its introduction. Consequently, where applying new rostering arrangements had resulted in the complainant being treated unfavourably on the ground of her sex, it had been open to an industrial tribunal to infer that those arrangements were applied with the knowledge of their unfavourable consequences for her as a single parent. An intention to produce those consequences could be inferred without evidence that the arrangements themselves were introduced with the intention of discriminating against her.

Assessing compensation

The amount of compensation awarded by a tribunal for unlawful discrimination must correspond to the damages, if any, which would have been awarded to the complainant if he or she had instead brought a claim in a civil court for damages in tort (s.65(1)(b) of the SDA; s.56(1)(b) of the RRA; s.26(1)(b) of the FE(NI)A). Therefore, the assessment of compensation is based on the principle that, as best as money can do it, the complainant must be put into the position he or she would have been in had the unlawful discrimination not happened (MoD v Cannock and others). In the words of the Court of Appeal in Alexander v The Home Office, "the objective of an award for unlawful ... discrimination is restitution."

That principle or objective is, however, subject to four important qualifications. Firstly, as the Court of Appeal in Coleman v Skyrail Oceanic Ltd put it: "Compensation is to be awarded for foreseeable damage arising directly from an unlawful act of discrimination." That is to say, tribunals may award compensation only for loss or damage which is caused by, and not too remote a consequence of, the unlawful discrimination. For example, the EAT in Wileman v Minilec Engineering Ltd held that the upsetting phone calls received by the complainant, who had been sexually harassed by her boss, as a result of press coverage of the case could not possibly have been foreseen by him. In addition, the fact that she was told by a prospective employer that it would not consider her until such time as the industrial tribunal had made its decision was too remote a consequence of the harassment.

The second qualification is that the complainant is obliged to take all reasonable steps to "mitigate" (that is, minimise) his or her losses resulting from the unlawful discrimination. In other words, the complainant cannot claim for losses which he or she has or could reasonably have avoided. Where, for example, the employer has unlawfully discriminated against the complainant by dismissing him or her, the complainant must take all reasonable steps to obtain alternative employment or another career. The onus is on the employer to show a failure to mitigate, and it will not succeed in doing so unless the complainant's conduct can be characterised as unreasonable. The fact that the complainant has been vindicated by the tribunal's finding of unlawful discrimination cannot be relied on to mitigate the compensation to which he or she would otherwise be entitled (Alexander v The Home Office).

The third qualification is that an award of compensation "may be affected by the conduct, character and circumstances not merely of the [employer] but also of the [complainant]" (Alexander v The Home Office). As we explain below, this means that an award for "injury to feelings" may include an element of "aggravated damages" or it may be less than it otherwise would have been.

The fourth qualification, like the third, arises from the fact that compensation for unlawful discrimination is "at large". That is, unlike damages for wrongful dismissal or unfair dismissal compensation, it is not limited to the financial losses which the complainant can specifically prove he or she has sustained as a result of the discrimination (Rookes v Barnard). Rather, the complainant is entitled to be compensated for all losses, financial and non-financial, so sustained. However, "it is impossible to say what is restitution" for the non-financial losses. This must depend upon the "experience and good sense" of the tribunal (Alexander v The Home Office).

In assessing compensation, the tribunal has to ask itself what would have happened but for the unlawful discrimination. This hypothetical question is not, according to the EAT in MoD v Cannock, a question of fact to be decided on the balance of probabilities. Rather, to answer it, the tribunal must estimate "in a broad and sensible manner" what the chances are that a particular thing would have happened and reflect those chances, whether they are more or less than even, in the amount of compensation which it awards. The question must also be answered on the basis of the best assessment that the tribunal can make having regard to all the available material. Such material will include what has actually happened since the unlawful discrimination, what the complainant says he or she would have done had it not occurred, and relevant statistical evidence.

By contrast, the EAT in Harvey (No.2) said, while the assessment of compensation will require the tribunal to consider a whole range of factors, "often what the tribunal does is to weigh them and say, in effect, 'doing the best we can we consider a fair and just award to be this amount'. Over-sophistication in the process will often itself lead to injustice to one party or the other." Similarly, the EAT in Wileman v Minilec Engineering Ltd held that a "broad brush" approach is called for where there a number of speculative matters.

The EAT in MoD v Cannock also stressed the need for tribunals "to keep a sense of due proportion" when assessing compensation. To that end, the EAT suggested that tribunals "do not simply make calculations under various different heads, and then add them up and award the total sum". "A sense of due proportion", the EAT said, "involves looking at the individual components of any award and then looking at the total to make sure that the total award seems a sensible and just reflection of the chances which have been assessed".

In any event, only if tribunals "have acted on a wrong principle or have misapprehended the facts or for other reasons have made a wholly erroneous estimate of the damage suffered" can appellate courts interfere with their awards of compensation (Coleman v Skyrail Oceanic Ltd). Consequently, tribunals enjoy a fairly wide discretion in assessing compensation.

Types of loss or damage

The types of loss or damage sustained by the complainant as a result of unlawful discrimination will vary according to the nature of the discrimination, although it is "almost inevitable" in sex discrimination cases that a claim for injury to feelings will be made (Murray v Powertech (Scotland) Ltd). Where the unlawful discrimination consists solely of sexual, racial or sectarian harassment, the complainant will generally not suffer financially as a result of it and, therefore, only a claim for injury to feelings will be appropriate. In the case of a discriminatory dismissal, however, the complainant may claim for loss of earnings and of fringe benefits as well as for injury to feelings. Where the complainant is denied employment or promotion on any of the prohibited grounds, he or she may claim for "loss of opportunity" in addition to injury to feelings. We will now examine each of the possible types of loss or damage in more detail.

Loss of earnings

The complainant can claim for "any pecuniary loss properly attributable to an unlawful act of discrimination" (Coleman v Skyrail Oceanic Ltd). This may include both "past (or accrued) loss" of earnings and "future (or prospective) loss" of earnings, of which only the former is readily calculable. Past loss of earnings is calculated, by reference to the complainant's net pay immediately before the unlawful discrimination occurred, from the date when it occurred to the date on which the award of compensation is made. Any earnings from new employment, and any social security benefits which were received or could have been claimed by the complainant during that period, are then deducted.

However, the complainant need not give credit for all benefits received by him or her as a result of the unlawful discrimination. For example, one industrial tribunal declined to set against its award for loss of earnings payments received by the complainant from the media after they took an interest in her story and paid for it (Woodward v Lown and Centre Line Insurance Services Ltd). Nor, where the complainant was dismissed when she became pregnant, is her loss of earnings reduced by the fact that she became pregnant knowing that she would be dismissed. However, the childcare costs which would notionally have had to be incurred to enable her to return to work after childbirth should be set off in full against her compensation for loss of earnings (MoD v Cannock).

The calculation of future loss of earnings is a highly speculative exercise. While there is no set way of calculating it, the EAT in MoD v Cannock recommended that tribunals should do so using the method adopted by the courts in personal injury cases. This entails multiplying the complainant's net annual loss of earnings by the appropriate "multiplier". To ascertain that figure, the EAT said: "Tribunals may reasonably expect help from the parties ... by reference to decided cases."

Otherwise, the starting-point is the length of time the complainant is likely to remain disadvantaged as a result of the unlawful discrimination. This figure takes account of relevant contingencies and uncertainties. In the case of a discriminatory dismissal, for example, these would include the complainant's future employment prospects, and how long the complainant would have remained employed by the employer if he or she had not been dismissed. The figure is then discounted for "accelerated payment" (that is, to reflect the fact that the complainant immediately receives a capital lump sum which he or she is expected to invest). The rate of return on any such investment is normally assumed by the courts to be 4.5%.

The highest awards for future loss of earnings have all been made to ex-servicewomen who were forced to resign or be dismissed on becoming pregnant, a policy which the MoD has conceded was contrary to the Directive and which it no longer operates. Some of those awards were described as "wholly unjustified" and "manifestly excessive" by the EAT in MoD v Cannock. Those apart, we believe that the highest award for future loss of earnings to date is £30,000. That sum was awarded in a sex discrimination case to a woman who resigned after her employer turned down her repeated requests for a jobshare. It represented the difference between the salary she would have earned had she stayed with the employer for the next five years and the salary she was currently earning (Given v Scottish Power plc).

Loss of fringe benefits

Fringe benefits (or "perks") which the complainant may have lost, and continue to be deprived of, as a consequence of being unlawfully discriminated against include the use of a company car, free lunches, subsidised travel, and so on. Putting a monetary value on many of these is not easy. In general, it is the cost to the complainant of replacing them.

The calculation of lost pension rights - usually by far the most valuable fringe benefit - is, however, more complex. The EAT in MoD v Cannock recommended that tribunals should calculate pension loss in accordance with the guidelines provided by three industrial tribunal chairs, after consultation with the Government Actuary's Department, contained in a booklet called Industrial tribunals - compensation for loss of pension rights (available from HMSO). According to these guidelines, the calculation of the complainant's "past loss" of pension benefits should be based on the employer's actual or (in the case of a final salary scheme) notional contributions. As for "future loss", the same contributions should be used and the same multiplier applied as in the calculation of future loss of earnings.

This "contribution method" is, however, rough and ready. Furthermore, since all upper limits on compensation for unlawful discrimination have been removed, and because of the principle on which the assessment of compensation is based (see above), it is arguably more appropriate to calculate pension loss using a more sophisticated, actuarial method. Another criticism of the "contribution method" is that it may be at odds with the ECJ's ruling in Marshall (No.2) (see above) that compensation for discrimination prohibited by the Directive must enable the losses sustained as a result of it to be made good "in full".

In the case of a discriminatory dismissal, there is no rule of law which requires any sum to be awarded for "loss of statutory rights" (that is, for the fact that the complainant will have to work for two years before he or she is protected from being unfairly dismissed in the future) (Harvey (No.2)).

Injury to feelings

The SDA, the RRA and the FE(NI)A all expressly provide that an award of compensation may include compensation for "injury to feelings" (that is, emotional harm of any description), whether or not the complainant has sustained any other type of loss or damage as a result of the unlawful discrimination (s.66(4) of the SDA; s.57(4) of the RRA; s.26(3) of the FE(NI)A).

The EAT in MoD v Cannock elaborated as follows: "Compensation for injury to feelings is not automatic. Injury must be proved [by the complainant]. It will often be easy to prove, in the sense that no tribunal will take much persuasion that the anger, distress and affront caused by the act of discrimination has injured the [complainant's] feelings. But it is not invariably so." It will not be so if, for example, the complainant was not conscious of the unlawful discrimination, since any injury to feelings must result from the knowledge of such (Coleman v Skyrail Oceanic Ltd). Nevertheless, the EAT in MoD v Sullivan said it would find it surprising if in most cases an award for injury to feelings - albeit a "modest" one - was not made.

According to the EAT in MoD v Cannock, there is a sufficient overlap between injury to feelings and "loss of congenial employment" for tribunals to confine themselves to making an award for injury to feelings, where such has been proved, which reflects within it "the hurt caused by the loss of a chosen career which gave job satisfaction". However, compensation may not be awarded for "loss of career prospects".

In the view of the EAT in Sharifi v Strathclyde Regional Council, injury to feelings, "disadvantage in the job market" and "loss of opportunity" (that is, as a result of the employer's failure to appoint or promote the complainant) are "very closely related". Therefore, tribunals should make separate assessments in respect of them only if it is appropriate to do so. It will be appropriate to assess loss of opportunity separately where it is unclear whether the complainant would have got the job or promotion but for the unlawful discrimination. In these circumstances, the complainant will be awarded a proportion of the compensation for loss of earnings which he or she would have received had the position been clear.

Additional guidance to tribunals as to awarding compensation for injury to feelings was given by the EAT in MoD v Cannock. It said: "It is wrong for industrial tribunals to make an award on the basis that it has or must have within it some kind of deterrent element ... an award of damages for injury to feelings is solely based on principles of compensation." The EAT in Secretary of State for Defence v Jones said: "All the tribunal should look at is what, in all the circumstances, is the harm suffered by [the complainant]." Consequently, the identity of the employer which inflicted that harm was not a relevant consideration in deciding whether to make an award for injury to feelings.

Guidance as to the size and range of awards for injury to feelings has also been given by the appellate courts. The Court of Appeal in Alexander v The Home Office said: "Awards should not be minimal ... On the other hand, just because it is impossible to assess the monetary value of injury to feelings, awards should be restrained. To award sums which are generally felt to be excessive does almost as much harm ... as do nominal awards." According to the EAT in Sharifi v Strathclyde Regional Council, although it is "intangible and difficult to assess", injury to feelings is "real and substantial, and should be reflected as substantial in the assessment of damages". The EAT went on to say that an award of £500 is "at or near the bottom end of the range of appropriate awards for injury to feelings", a view with which the EAT in Deane v London Borough of Ealing later agreed.

The highest recorded award for injury to feelings to date is £15,000. That was made by the Fair Employment Tribunal to a Roman Catholic woman, whose employer failed to appoint her to a position to which it did appoint at least one Protestant who was less intelligent and experienced than her (Duffy v Eastern Health & Social Services Board). The tribunal found that, over "a considerable period of time", the complainant had suffered "fear, humiliation, frustration, insult, stress and deep hurt arising out of a blatant act of unlawful discrimination". Furthermore, the injury to her feelings was made "infinitely greater" because, following the first hearing before the tribunal, she was "abandoned by management and shunned by her colleagues".

The highest award for injury to feelings so far in a sex discrimination case is £10,000 (A and B v R1 and R2). That amount was awarded to each of two waitresses who had been propositioned and sexually assaulted at work by the manager of their employer's restaurant. An award of £10,000 is also the highest yet made for injury to feelings in a racial discrimination case (Singh v London Borough of Ealing). That case concerned a Sikh man whose application for a job, which was "tailor-made" for him, was rejected in favour of that of a white candidate with considerably inferior qualifications and experience.

Only recently, however, has there been a substantial increase in awards for injury to feelings. This reflects "current social mores", according to the EAT in Automotive and Financial Group Ltd v Bark, which also held that such awards should not be reduced because substantial compensation for loss of earnings has been awarded. The EAT in MoD v Cannock commented that awards for injury to feelings have increased due to inflation and "as the courts have become more mindful of the humiliation, anger and distress that sex discrimination can cause". The removal of the upper limits on compensation for unlawful discrimination has also contributed to this trend. In any event, tribunals "should always award the going rate for compensation, even if it is more in real terms than it would have been at the date of the injury complained of" (MoD v Cannock).

The level of previous awards for injury to feelings may, however, be "of little assistance" in fixing the amount of any particular award (Noone v North West Thames Regional Health Authority), since the range of such awards "will vary widely depending on the detriment which is caused and the nature of the discrimination" (Wileman v Minilec Engineering Ltd). In the latter case, the EAT upheld a tribunal's award of £50 for the injury to the complainant's feelings resulting from sexual harassment by her boss because the tribunal had found that she was not in fact upset by his conduct, taking into account that she occasionally wore "scanty and provocative" clothes at work.

In Alexander v The Home Office the Court of Appeal confirmed that the complainant's own conduct can reduce the award for injury to feelings, although recently a tribunal declined to set against its award of £2,500 for injury to feelings a payment of £10,000 received by a victim of sexual harassment when she sold her story to a national newspaper. Media attention was not aroused until she gave evidence to the tribunal, and the distress which she suffered when she was harassed was "real and significant" (Woodward v Lown and Centre Line Insurance Services Ltd).

In any event, it is clear that injury to feelings is not assessed solely subjectively, in terms of to what extent the particular complainant was affected by or contributed towards the unlawful discrimination. In Snowball v Gardner Merchant Ltd, a case concerning a woman who alleged that she had been sexually harassed at work, the EAT said that the injury to the woman's feelings "must be looked at not only subjectively with reference to her as an individual, but objectively with reference to what any ordinary reasonable female employee would feel".

More recently, the EAT in MoD v Cannock seemed to imply that injury to feelings should not be assessed subjectively at all. Speaking about women who have been dismissed from the armed services because they were pregnant, it said: "... it is both unseemly and non-productive for [them] to be questioned about whether the baby was planned or unplanned or about what means of contraception were or might have been used or about abortion. The degree of hurt to the feelings is not likely to be significantly more if the baby was unplanned or significantly less if it was planned. The injury to feelings which might be sustained arises from the dismissal for being a woman who is pregnant."

Aggravated damages

Aggravated damages may be awarded where the motive for the unlawful discrimination, or the manner in which the employer committed it, heightened the injury to the complainant's feelings. An award for injury to feelings should include an element of aggravated damages where the employer has "behaved in a high-handed, malicious, insulting or oppressive manner" in unlawfully discriminating against the complainant (Alexander v The Home Office). For example, the failure of a member of an interview panel to disclose to her colleagues that she knew that the complainant had a relevant qualification which they were not aware of amounted to "conduct of a malicious kind" justifying an award of £1,500 aggravated damages (Patel v Leeds Metropolitan University). Similarly, an employer's failure to apologise for workplace notices containing racially "offensive, insulting and degrading" material, and the employer's maintaining that these were "merely a joke and part of the normal banter in the workplace", showed "nothing but callous disregard" for the feelings of the complainants, both of whom were black, and led to an award of £1,750 aggravated damages (Patel and Harewood v T & K Improvements Ltd and Johnson).

In considering whether to award aggravated damages, the tribunal is also entitled to take into account unsatisfactory replies to a questionnaire served under s.74 of the SDA or s.65 of the RRA (City of Bradford Metropolitan Council v Arora) or, by analogy, s.28 of the FE(NI)A. In a recent case where replies to such a questionnaire were found to be "misleading, inconsistent and untruthful", and the employer had disclosed "irrelevant and misleading" documents while failing to disclose relevant ones, the tribunal awarded £1,000 by way of aggravated damages (Webster v MoD). In that case also, the employer had persisted in resisting the complaint until it was forced to concede in evidence before the tribunal that it had unlawfully discriminated against the complainant.

The highest recorded award of aggravated damages to date is £10,000, on top of an award for injury to feelings of the same amount. It was made by the Fair Employment Tribunal to a young Roman Catholic woman, who was dismissed by her employer after having been subjected to sectarian harassment over the previous three years (Neeson v Securicor Ltd). The tribunal said the facts of this case revealed "discrimination at its most blatant from threats, taunts, abuse, blame, mockery, culminating in termination of a contract of employment. There was management participation in such acts and total indifference to the plight of a young employee in her first job where she was the sole representative of the minority community at a location where inside and out the majority community dominate."

Exemplary damages

The object of exemplary (or punitive) damages is "to punish and deter" rather than to compensate, and they "can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay" (Rookes v Barnard). They can only be awarded, however, in respect of torts which existed prior to 1964 (Gibbons and others v South West Water Services Ltd). Consequently, they cannot be awarded under the RRA, which created the tort of unlawful racial discrimination (Deane v London Borough of Ealing). By analogy, they cannot be awarded under the SDA or the FE(NI)A either.

In the case of the SDA, however, this position is arguably inconsistent with the ECJ's ruling in Marshall (No.2) (see above) that the measures specified in Article 6 of the Directive must have "a real deterrent effect on the employer". Therefore, any existing or prospective public sector worker who considers he or she has been discriminated against contrary to the Directive could seek to rely directly on Article 6 in order to secure an award of exemplary damages. Meanwhile, in a recent consultation paper entitled Aggravated, exemplary and restitutionary damages (No.132, available from HMSO), the Law Commission provisionally recommended that exemplary damages should be available to all victims of unlawful discrimination. A formal report is due to be published sometime next year.

Interest

As we have mentioned, the ECJ in Marshall (No.2) ruled that Article 6 of the Directive required an award of compensation under the SDA to include interest on the principal amount from the date of the unlawful discrimination to the date when the compensation is paid. The ECJ said this must be regarded as "an essential component of compensation".

Consequently, industrial tribunals were given a discretion to include interest on any award of compensation under the SDA made after 22 November 1993 (17 December 1993 in Northern Ireland) by reg. 3(1) of the Sex Discrimination and Equal Pay (Remedies) Regulations 1993 and the Sex Discrimination and Equal Pay (Remedies) Regulations (Northern Ireland) 1993. A tribunal must consider whether to exercise this discretion without the complainant having to make an application.

The Race Relations (Interest on Awards) Regulations 1994 (1994 SI No.1748) and the Fair Employment Tribunal (Remedies) Order (Northern Ireland) 1995 (1995 SR No.240) gave industrial tribunals in Great Britain and the Fair Employment Tribunal the same discretion to include interest on any award of compensation under the RRA and the FE(NI)A made after 1 August 1994 and 17 July 1995 respectively (reg. 2(1) and article 3(1)).

The discretion given to tribunals by both the 1993 and the 1994 Regulations and by the 1995 Order extends to their making an award of interest in terms which have been agreed between the parties (reg. 3(2), reg. 2(2) and article 3(2)). Otherwise, the rates and the calculation of interest are the same under both sets of Regulations and under the Order (regs. 4 to 7, regs. 3 to 6 and articles 4 to 7 inclusive). The rate to be applied in England and Wales is the one prescribed for the Special Investment Account under rule 27(1) of the Court Funds Rules 1987, currently 8% per annum. In Scotland, it is the rate fixed by the Act of Sederunt (Interest in Sheriff Court Decrees or Extracts) 1975. In Northern Ireland, it is the rate in force in relation to decrees in the county court. Where the rate to be applied has varied during a period for which interest is to be calculated, the tribunal may apply such median or average of those rates as it considers appropriate.

Interest is calculated as simple interest which accrues from day to day. The period for which it is calculated depends on the part of the award of compensation on which it is included, and on whether or not there are particular "exceptional circumstances" (see below). As regards compensation for injury to feelings, interest is normally calculated for the period beginning on the date of the unlawful discrimination and ending on the date on which the calculation is made by the tribunal ("the day of calculation"). In the case of compensation for all other types of loss or damage sustained before the day of calculation, interest is normally calculated from the date half way through that period to the day of calculation. No interest may be included, however, on any sum awarded for a loss or matter which will occur after the day of calculation. This includes compensation for pension loss (MoD v Cannock).

Where the tribunal takes the view that there are exceptional circumstances which are such that "serious injustice would be caused" if interest were to be awarded in respect of the normal calculation periods, then it can calculate interest on the whole or parts of the award of compensation for such longer or shorter period or periods as it considers appropriate in the circumstances. Those exceptional circumstances may relate to the case as a whole or to a particular part of the award of compensation. What is "exceptional" is a matter for the tribunal, taking "a sensible, fair and robust approach" (MoD v Cannock). Where, for example, the whole of the complainant's loss was sustained many years before the day of calculation, the tribunal is entitled to award interest over a longer period. Conversely, where there was delay in presenting the complaint for which the complainant was wholly or partly responsible, the tribunal is expected to award interest over a shorter period or to award none at all (MoD v Cannock).

Both the 1993 and the 1994 Regulations and the 1995 Order require a tribunal's written decision to contain a statement of the total amount of any interest awarded and, unless this amount has been agreed between the parties, either a table showing how it has been calculated or a description of the method of calculation. Alternatively, where the tribunal chooses not to make an award of interest, its written decision must give reasons for this (reg. 8, reg. 7 and article 13).

Where the whole or part of any award of compensation under the SDA, the RRA or the FE(NI)A remains unpaid by the employer on the day after the award was made, interest will accrue on that sum from, and including, that date onwards. The rate at which it will do so is the one specified in s.17 of the Judgments Act 1838 on the date the award was made (currently 8% per annum) or, in Northern Ireland, the rate in force in relation to interest on amounts awarded by decree in the county court on that date (articles 3(1) and 4 of each of the Industrial Tribunals (Interest) Order 1990 (1990 SI No.479), the Industrial Tribunals (Interest) Order (Northern Ireland) 1990 (1990 SR No.87) and the Fair Employment Tribunal (Interest) Order (Northern Ireland) 1992 (1992 SR No.433), as amended by reg. 10(a) of the 1993 Regulations, reg. 9(a) of the 1994 Regulations and article 15(a) of the 1995 Order). If, however, the employer pays the full amount of the award, including interest, within 14 days after the date on which it was made, then no interest will have accrued on any part of it as previously described (reg. 10(b) of the 1993 Regulations; reg. 9(b) of the 1994 Regulations; article 15(b) of the 1995 Order).

Recommendations

The SDA, the RRA and the FE(NI)A all provide that an industrial tribunal or, in the case of the FE(NI)A, the Fair Employment Tribunal may make "a recommendation that the [employer] take within a specified period action appearing to the tribunal to be practicable for the purpose of obviating or reducing the adverse effect on the complainant of any ... discrimination to which the complaint relates" (s.65(1)(c) of the SDA; s.56(1)(c) of the RRA; s.26(1)(c) of the FE(NI)A). Examples of recommendations which have been made by tribunals appear in the box.

The tribunal cannot make a general recommendation that the employer discontinue a discriminatory practice altogether (MoD v Jeremiah). Nor can the tribunal recommend that an increased salary, or indeed any remuneration, should be paid to the complainant (Irvine v Prestcold Ltd). In addition, where the complainant has been passed over for promotion on one of the prohibited grounds, the tribunal has no power to recommend that the employer should promote the complainant to the next suitable vacancy (British Gas plc v Sharma). All it can recommend is that the employer should draw the attention of the members of any selection panel considering any future application of the complainant for the post to the need for compliance with the RRA, or as the case may be, and that the employer should record and remind those members of why the complainant previously failed to get the job (Noone v North West Thames Regional Health Authority (No.2)).

Those limitations must be regarded as binding on tribunals, unless the complainant is entitled to rely on Article 6 of the Directive in order to challenge s.65(1)(c) of the SDA on the basis that it fails to enact the measures required to attain the Directive's objective as stated by the ECJ in Marshall (No.2) (see above). "Such measures may include, for example, provisions requiring the employer to offer a post to the [complainant]", said the ECJ in Von Colson and Kamann v Land Nordrhein-Westfalen. They must have "a real deterrent effect on the employer", said the ECJ in Marshall (No.2), and s.65(1)(c) of the SDA as limited by appellate courts in the UK arguably does not.

Where the employer fails "without reasonable justification" to comply with a tribunal's recommendation, the tribunal may, if it thinks this is just and equitable: (a) increase the amount of any award of compensation which it has already made; or (b) make such an award if it could have made one before but did not do so (s.65(3) of the SDA; s.56(3) of the RRA; s.26(5) of the FE(NI)A). Whether there was reasonable justification is a matter for the tribunal, taking into account "practical realities" and allowing "a period of time to sort out the difficulties consequent upon the finding [of unlawful discrimination]" (Nelson and another v Tyne & Wear Passenger Transport Executive).

Costs

An industrial tribunal in Great Britain may order the employer to pay the complainant's costs only if, in its opinion, the employer "has in ... conducting the proceedings acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably" (rule 12(1) in Schedule 1 to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993 (1993 SI No.2687) and their counterpart in Scotland). Such conduct includes defending a case which is manifestly hopeless from the start, and persisting in defending a case once it turns out to be indefensible. It also includes, during the course of the hearing, time-wasting and making outrageous and unsubstantiated allegations, as well as being abusive or disruptive. Any such conduct may also merit an award of aggravated damages (see above) if the complaint is upheld.

The tribunal cannot order the employer to pay more than £500 unless the parties agree on a higher sum, or the complainant first has the whole or part of his or her costs "taxed" (that is, assessed by the tribunal) on such county court scale or sheriff court table of fees as the tribunal directs (rules 12(3) and 12(6)). In a case where someone other than or as well as the employer is liable for the unlawful discrimination - for example, where that consisted of sexual, racial or sectarian harassment - that person may not be ordered to pay any of the complainant's costs if he or she is personally unable to do so.

The complainant and his or her witnesses may also be paid allowances, on a fixed scale, in respect of the expenses which they have incurred in attending the hearing. These may include loss of earnings and travelling or other expenses, and they are paid whether or not the complainant is successful at the hearing. Forms for claiming the allowances will be supplied, on request, by the clerk to the tribunal at the end of the hearing.

In Northern Ireland, an industrial tribunal and the Fair Employment Tribunal may order the employer to pay the complainant's costs only if, in their opinion, the employer "has in ... conducting the proceedings acted frivolously, vexatiously or otherwise unreasonably" (rule 11(1) in both the Schedule to the Industrial Tribunals (Rules of Procedure) Regulations (Northern Ireland) 1981 (1981 SR No.188) and Schedule 1 to the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 1989 (1989 SR No.445)). The tribunal may order the employer to pay either a specified sum or the whole or part of the complainant's agreed or taxed costs.

Contracting-out

Any term of a contract which purports to contract-out of the SDA or the RRA is unenforceable by any person who would benefit from the exclusion or limitation in question (s.77(3) of the SDA; s.72(3) of the RRA). That does not apply, however, to an agreement settling a complaint of unlawful sex, marital or racial discrimination which was made with the assistance of an ACAS conciliation officer (or, in Northern Ireland, a Labour Relations Agency conciliation officer), or an agreement which satisfies the conditions regulating compromise agreements (s.77(4); s.72(4)). Any provision in an agreement which purports to contract-out of the FE(NI)A, or to preclude a person from complaining to the Fair Employment Tribunal of unlawful sectarian discrimination is void (s.32A(1) of the FE(NI)A). That does not apply, however, to any agreement settling such a complaint made with the assistance of a Labour Relations Agency conciliation officer (s.32A(2)).

Conciliated settlements were reached in 41% of the 3,136 sex discrimination cases completed by ACAS during 1994. The corresponding figures for racial discrimination cases were 30% and 1,679. Amounts paid under settlement agreements generally exceed those awarded by tribunals as compensation, while employers gain by not spending time and money preparing for and attending a tribunal hearing and by avoiding unwelcome press reporting of those proceedings.

Any term of a contract which provides for unlawful racial discrimination against a party to the contract, and which is not otherwise beneficial to that party, is void (s.72(1) of the RRA). Any term of a contract, or any term of a collective agreement or rule made by an employer, which provides for unlawful sex or marital discrimination against a party to the contract, or anyone who is or is genuinely and actively seeking to become one of that employer's employees, and which is not otherwise beneficial to that party or person, is also void (s.77(1) of the SDA as amended by s.6(1) of the Sex Discrimination Act 1986). Further, on a complaint by that party or person, an industrial tribunal may make a declaration to that effect (s.6(4D) of the Sex Discrimination Act 1986). It may not, however, grant any other remedy. Arguably, therefore, s.6(4D) of the Sex Discrimination Act 1986 fails to attain the Directive's objective as stated by the ECJ in Marshall (No.2) (see above).

Any term of a contract which provides for unlawful sex, marital or racial discrimination against a party to the contract, but which is otherwise beneficial to that party, is unenforceable against him or her (s.77(2) of the SDA; s.72(2) of the RRA). On the application of any person interested in the contract, a county or sheriff court may make such order as it thinks just for removing or modifying the unenforceable term (s.77(5); s.72(5)). A majority of the Court of Appeal in Meade-Hill and another v The British Council held that a woman was entitled to apply to a county court pursuant to s.77(5) of the SDA for a declaration that the mobility clause in her contract of employment was unenforceable against her, and for an order removing or modifying it, even though it had not been invoked against her. The inclusion of the clause of itself constituted indirect discrimination against her as a woman contrary to s.77(2) of the SDA.

An order made under s.77(5) of the SDA or s.72(5) of the RRA may include provision as respects any period before it was made (s.77(6); s.72(6)). Such retrospective provisions are, however, limited to ones which are ancillary to or consequential upon the main part of the order. They do not include an order for repayment of sums overpaid by the complainant, and it is very unlikely that it was intended that a claim for restitution could be pursued under s.72(6) of the RRA (Orphanos v Queen Mary College) or, by analogy, s.77(6) of the SDA.

Where any term is included in or omitted from a contract in breach of the FE(NI)A, or in consequence of such a breach, neither the contract nor any term of it is unenforceable (s.32(1) of the FE(NI)A). However, where a complaint of unlawful sectarian discrimination has been presented to the Fair Employment Tribunal, either the complainant or the employer may apply to the High Court to revise the contract or any of its terms (s.32(1A)). On such an application, the Court may make such order as it considers just in all the circumstances so as to secure that the contract no longer breaches the FE(NI)A, or has any effect in consequence of such a breach (s.32(2)).

Unequal pay

The EqPA and the Equal Pay Act (Northern Ireland) 1970 give to all employees and most self-employed persons ("workers"), in Great Britain and in Northern Ireland respectively, a right to contractual terms of employment or engagement which are not less favourable than those of their chosen "comparators". These must be individual workers or classes of workers of the opposite sex who are doing the same or broadly similar work, work rated as equivalent, or work of equal value. The right under the EqPA takes effect by implying an "equality clause" into every contract of employment or contract for services. However, the equality clause does not operate if the employer shows that the variation in terms is genuinely due to a material factor other than sex (s.1(3) of the EqPA).

Article 119 of the Treaty of Rome requires every Member State to "maintain the application of the principle that men and women should receive equal pay for equal work". The EqPA must be construed so as to give effect to and to be consistent with Article 119 as interpreted by the ECJ. Further, whenever there is a conflict or inconsistency between Article 119 and the EqPA the former will prevail.

At the same time, Article 119 gives to all paid workers in the UK a free-standing right to equal pay, independent of the right under the EqPA, which is directly enforceable against employers in both the private and the public sectors. Article 119 may also be relied on by both employees and their dependants against the trustees of an occupational pension scheme. Like s.1(3) of the EqPA, Article 119 does not apply if the employer shows that the variation in pay is justified on objective grounds unrelated to any discrimination on grounds of sex.

The equality clause implied by the EqPA operates in relation to terms of a worker's contract whether they are concerned with pay or not, while Article 119 applies only to pay. For the purpose of Article 119, however, "pay" includes indirect and non-contractual (or ex gratia) benefits, statutory redundancy payments and unfair dismissal compensation. It also includes benefits payable under an occupational pension scheme.

Remedy under EqPA

A worker seeking to enforce his or her right under the EqPA may complain to an industrial tribunal. The only remedy which the tribunal may grant to the worker under the EqPA is arrears of remuneration or damages for breach of contract (s.2(1) of the EqPA). Arrears of remuneration will be awarded where the worker is or was being paid less money than the comparator under their contracts. An award of damages will be made where the worker is or was being denied a contractual benefit in kind, such as a mortgage subsidy or private medical insurance, which the comparator is entitled to.

The worker cannot recover arrears of remuneration or damages in respect of any period earlier than two years before the date on which he or she started legal proceedings, whether these were before the tribunal or a civil court (s.2(5) of the EqPA). Arguably, however, this limitation, which has no counterpart in Article 119, is contrary to Article 2 of the Equal Pay Directive (No.75/117/EEC). This is in the light of the ECJ's ruling in Marshall (No.2) (see above) that the limit previously imposed on awards of compensation under the SDA was contrary to Article 6 of the Equal Treatment Directive (No.76/207/EEC), which is identical to Article 2.

If that argument, which is yet to be tested, were to succeed, then it follows that any worker in the public sector seeking to enforce his or her right under the EqPA may rely on Article 2 before an industrial tribunal, as against his or her employer, in order to set aside the limitation. It should, however, be noted that, since its judgment in Marshall (No.2), the ECJ has ruled that a similarly-worded limitation in the Social Security Act 1975 was compatible with the Directive on equal treatment in social security matters (No.79/7/EEC) (Johnson v Chief Adjudication Officer (No.2)).

Interest and costs

Industrial tribunals in Great Britain and Northern Ireland have a discretion, under the Sex Discrimination and Equal Pay (Remedies) Regulations 1993 and under the Sex Discrimination and Equal Pay (Remedies) Regulations (Northern Ireland) 1993, to include interest on any award of arrears of remuneration or damages made after 22 November 1993 and 17 December 1993 respectively. Both the discretion and the rates and calculation of interest are the same as those in relation to awards of compensation other than for injury to feelings made under the SDA (see above). In addition, unpaid awards of arrears of remuneration or damages made under the EqPA (and its counterpart in Northern Ireland) carry interest in the same way as do unpaid awards of compensation made under the SDA (see above).

The discretion of tribunals to award costs is the same in equal pay cases as it is in unlawful discrimination cases (see above), and s.77 of the SDA as amended by s.6 of the Sex Discrimination Act 1986 applies equally to the EqPA (see above).

Remedy under Article 119

Article 119 imposes on employers (and trustees of occupational pension schemes) an "obligation of result" whereby men and women must receive the same pay for the same work. Until the judgment of the ECJ in Johnson (No.2) (see above), it was generally assumed that retrospective claims brought directly under Article 119 could be made in respect of an entitlement to "pay" during any period of work after 8 April 1976 (the date of the ECJ's judgment in Defrenne v SABENA) or, if they concerned benefits payable under an occupational pension scheme (but not the right to join such a scheme), any period of employment subsequent to 17 May 1990 (the date of the ECJ's judgment in Barber v Guardian Royal Exchange Assurance Group). The effect of Johnson (No.2) appears to be, however, that it would be compatible with Community law for an industrial tribunal to apply a limitation comparable to the one in s.2(5) of the EqPA (see above) to all Article 119 claims.

However, the limitation at issue in Johnson (No.2) was compatible with Community law because it did not "make it virtually impossible for an action to be brought by an individual relying on Community law". In this regard, applying s.2(5) of the EqPA to a claim under Article 119 concerning an entitlement which arose more than two years before the claim was brought would make it impossible to enforce that Community law right. The extent to which s.2(5) of the EqPA applies to Article 119 claims generally, if at all, therefore remains unresolved, and further case law developments are awaited.

Discrimination remedies - main points to note

Unlawful discrimination

Unequal pay

Recommendations - some examples

The following are examples of recommendations which have been made by tribunals:

Case list

A and B v R1 and R2 23.3.94 Case Nos. 55253/93 and 55254/93

Alexander v The Home Office [1988] IRLR 190

Automotive and Financial Group Ltd v Bark 10.10.94 EAT 398/94

Barber v Guardian Royal Exchange Assurance Group Ltd [1990] IRLR 240

British Gas plc v Sharma [1991] IRLR 101

City of Bradford Metropolitan Council v Arora [1989] IRLR 442

Coleman v Skyrail Oceanic Ltd [1981] IRLR 398

Deane v London Borough of Ealing [1993] IRLR 209

Defrenne v SABENA [1976] ICR 547

D'Ettore v Trusthouse Forte (UK) Ltd 8.1.88 Case No.16042/87

Dickinson and Field v Mason and Mason 23.11.93 Case Nos. 28660/93 and 38067/93

Duffy v Eastern Health & Social Services Board [1992] IRLR 251

Gibbons and others v South West Water Services Ltd 16.11.92 Court of Appeal

Given v Scottish Power plc 20.1.95 Case No.S/3172/94

Harvey v Institute of the Motor Industry (No.2) 24.5.95 EAT 208/94

Hurley v Mustoe (No.2) [1983] ICR 422

Irvine v Prestcold Ltd [1981] IRLR 281

Johnson v Chief Adjudication Officer (No.2) [1995] IRLR 157

London Underground Ltd v Edwards [1995] IRLR 355

McClenaghan and Rice v British Shoe Corporation Ltd 3.3.94 Case No.2688/91

Marshall v Southampton and South-West Hampshire Area Health Authority (No.2) [1993] IRLR 445

Meade-Hill and another v The British Council 7.4.95 Court of Appeal

Ministry of Defence v Cannock and others [1994] IRLR 509

Ministry of Defence v Jeremiah [1978] IRLR 402

Ministry of Defence v Sullivan [1994] ICR 193

Mulligan v Eastern Health & Social Services Board 16.3.94 Case No.1258/93

Murray v Powertech (Scotland) Ltd [1992] IRLR 257

Neeson v Securicor Ltd 21.12.93 Case No.153/91 FET

Nelson and another v Tyne & Wear Passenger Transport Executive [1978] ICR 1183

Noone v North West Thames Regional Health Authority [1988] IRLR 195

Noone v North West Thames Regional Health Authority (No.2) [1988] IRLR 530

Orphanos v Queen Mary College [1985] IRLR 349

Patel v Leeds Metropolitan University 12.10.93 Case No.60199/92

Patel and Harewood v T & K Improvements Ltd and Johnson 24.3.94 Case Nos. 57783/92 and 57778/92

Rookes v Barnard [1964] AC 1129

Secretary of State for Defence v Jones 2.12.93 EAT 594/93

Sharifi v Strathclyde Regional Council [1992] IRLR 259

Singh v London Borough of Ealing 9.2.95 Case No.28914/89

Snowball v Gardner Merchant Ltd [1987] IRLR 397

Tickle v Governors of Riverview CF School and Surrey County Council 8.7.94 Case No.32420/92

Von Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891

Webster v Ministry of Defence 25.2.93 Case No.2628/91

Whittington v Morris and Greenwich Health Authority 6.6.90 Case No.17846/89

Wileman v Minilec Engineering Ltd [1988] IRLR 144

Woodward v Lown and Centre Line Insurance Services Ltd 17.12.93 Case No.10403/93