Sky's the limit for discrimination claims

Updated guidance on awards for discrimination has recently been released

Very rarely do employees head off to an employment tribunal in order to get their job back if they believe they have been unfairly dismissed. Most of the time they are hoping to walk away with some form of financial compensation.

In ‘ordinary’ unfair dismissal cases there is a limit on the amount of compensation a tribunal can award, when it calculates ongoing losses as a consequence of the dismissal.

The compensatory award is subject to a statutory cap, which is the lower of £89,493 or 52 weeks’ gross pay.¹ So, no matter how far an employer has strayed by not following legal principles or the law, there will be a degree of certainty when it comes to establishing their liability should they lose the tribunal case. (think P&O Ferries).

But in cases of discrimination involving a protected characteristic, such as age, sex, disability, religion etc., there is no statutory cap. Hence the reason why occasionally we see headlines about claims attracting awards of many millions in compensation.

Obviously not all cases of discrimination attract huge awards. Employment tribunals have guidance whereby they can roughly categorise the severity of the discriminatory behaviour and the effect on the victim, and then make an appropriate award.

This gives a measure of consistency to discrimination awards and goes some way to stopping wholly outrageous payouts for minor or trivial cases.

Employees and employers can also use the guidance to gauge a likely payout if the claim succeeds. It always aids any negotiation if both parties know what the maximum award is likely to be.