The Employment Appeal Tribunal (EAT) recently confirmed that the Simmons v Castle 10% uplift to injury to feelings awards should be applied in discrimination cases in employment tribunals, potentially increasing the compensation that can be awarded.
In Olayemu v Athena Medical Centre and Okoreaffia, Dr Olayemi was a GP employed by Athena Medical Centre from 1 July 2001 where Dr Okoreaffia was the principal doctor. The claimant was dismissed in August 2008 and as a result of the dismissal and treatment by her employer she suffered Post Traumatic Stress Disorder and depression. She brought a claim for sex discrimination before the employment tribunal, who found that her employer had subjected her to a campaign of harassment designed to intimidate, humiliate and drive her from the practice. The tribunal awarded compensation for injury to feelings and included an uplift of 10%. The employer appealed the decision, arguing that a 10% uplift should not have been applied to the award for injury to feelings.
The general principal in respect of awards for injury to feelings is that they should compensate claimants for the injury they have suffered, but should not punish the respondent's guilt. In Vento v Chief Constable of West Yorkshire Police the Court of Appeal gave guidance on the level of compensation to be awarded for injury to feelings and set out three bands of potential awards. The EAT in Da'Bell v NSPCC subsequently approved an increase in line with inflation to these three bands.
In the case of Simmons v Castle the Court of Appeal decided that the level of general damages in certain types of claims should be increased by 10% after 1 April 2013 to reflect the fact that claimants were no longer be able to recover success fees and 'after the event' insurance premiums from their opponents as part of costs awards (as a result of the Legal Aid, Sentencing and Punishment of Offends Act 2012). Until recently it has been unclear whether employment tribunals should apply this uplift as these costs were not usually recoverable by claimants in the tribunal.
Conflicting EAT decisions have left tribunals unsure whether Simmons should be applied, however the issue was recently given consideration by the EAT in Beckford v London Borough of Southwark. This case reviewed the relative positions of civil court and employment tribunal claimants and determined that there was no difference between them when it came to funding arrangements for claims. It therefore found that an award at an employment tribunal should be comparable with an award made in the civil courts.
The recent case of AA Solicitors Ltd and another v Majid determined that tribunals are entitled to take into account the effect of inflation on the Vento bands when calculating compensation and there is no need to wait for further decisions by the EAT. This case also commented that the 'weight of authority' was in favour of the 10% uplift to general damages under Simmons applying to injury to feelings awards in employment tribunals.
The EAT in this case acknowledged the conflicting authorities at EAT level but determined that in the absence of a decision of the Court of Appeal, Beckford should be followed and as such a 10% uplift applied. The EAT identified Beckford as a persuasive authority, and in the absence of a higher decision, it provided tribunals with the most recent and comprehensive review of the position.
What does this mean?
These recent decisions demonstrate the potential level of costs that can be incurred by employers in discrimination claims has increased significantly. No doubt claimants and their advisers will now be factoring in these new authorities to their schedules of loss and settlement negotiations.
When assessing the potential risk of a claim employers should take into account both inflationary increases to the Vento bands and the general, Simmons 10% uplift to an injury to feelings awards.
When it comes to discrimination claims, prevention is better (and cheaper) than cure for employers. Relevant policies should be kept under review and staff training carried out regularly to help avoid discrimination claims. Employers should remain vigilant for any discriminatory behaviour by employees and should be quick to deal effectively with any possible issues which arise.