The Equal Opportunities Review’s excellent survey on discrimination compensation awards has just been published for awards in 2011 and is based on research of cases at the Bury St Edmunds Employment Tribunal along with cases sent to the EOR by individual lawyers.

The number of cases surveyed dropped from 391 in 2010 to 226 in 2011. The explanation provided in the report is the simultaneous decrease in the number of claims lodged at the Employment Tribunal (borne out by the recent Employment Tribunal statistics published – see my previous blog – which showed a surprising reduction in discrimination claims).

Despite the reduction in claims, the total amount of compensation awarded in the cases surveyed by the Equal Opportunities Review (EOR) was a record at £8,774,403. By comparison, the total sum awarded in 2010 was just over £5.3million.

This record total though does contains a staggering award of £4.5 million in one case concerning combined sex and race discrimination (Michalak v The Mid Yorkshire Hospitals NHS Trust) and a further award of almost £1million in another race discrimination claim (Browne v Central Manchester University NHS Foundation Trust).

My colleague, Duncan Murray, an accredited discrimination law specialist, commented on the £4.5 million award previously - £4.5m Award Could Lead To Inflated Settlement Expectations – and expressed considerable reservations as to whether the decision in respect of the amount awarded was correct.

Removing both the £4.5 million award and the (just under) £1 million award from the figures sees a total award figure of just under £3.5million, which is significantly lower than the total sum for 2010.

The EOR points out that the two top-end awards obviously skew the figures somewhat and suggest that the average amount awarded in all discrimination claims in 2011 was £38,848. However, the EOR's median figures (noted below) provide us with a more realistic reflection of what a claimant may be awarded though this will, of course, depend very much on the facts of each individual case including, crucially, the amount that the employee earned and the level of any loss of earnings as well as the effect of the discriminatory behaviour on the individual.

As a general observation, we see a downward movement in the amount awarded, with only sex, sexual orientation and age discrimination slightly bucking the trend. Even then, awards for sexual orientation and age discrimination remain below 2009 figures, leaving sex discrimination as the only category showing a steady increase each year.

Click here to view table

The report also highlights that we are beginning to see the Tribunal exercising its power (under the Equality Act 2010) to give wider action recommendations to respondents in order to promote equality in the workplace. These wider recommendations, according to the EOR's report, were made in 12 of the 226 cases in 2011 and included:

  • requiring an employer to undertake equality awareness training for managers and, in one case, a suggestion to provide diversity training “through the entire organisation”;
  • providing guidance to managers on sickness absence procedures, specifically including awareness of disability issues; and
  • obtaining the services of a qualified HR professional to review and amend an employer’s current employment policies to ensure compliance with all aspects of employment law.
  • Previously, Tribunals were only able to make recommendations in relation to alleviating the effect of the discrimination on the particular claimant, rather than more general recommendations applicable across the workforce.

It is worth commenting though that the Government is currently consulting on the possibility of removing the Tribunal’s power to make such recommendations. This would seem to be a backward step and it will be interesting to see what comes out of it. The consultation closes on 7 August.

Of course, the EOR are unable to take account of the many more claims that do not reach full hearing and, instead, conclude by way of agreed settlement for undisclosed sums. Perhaps the most important point for employers to take away from this year’s report is that awards in discrimination claims are unlimited. If nothing else, the Michalak case is a stark reminder that unlawful discrimination within an organisation can be extremely costly to both the business and individual employees alike who could find themselves jointly and severally liable to pay compensation awards at record levels.

It is essential that employers take the necessary steps, including the provision of appropriate training for employees and managers, to ensure that they minimise the risk of a claim being made.