Guidance issued by the Presidents of the Employment Tribunals in England, Wales and Scotland has revised the three broad bands of compensation for injury to feelings awards in discrimination cases.

An injury to feelings award may be made by an Employment Tribunal to compensate a claimant for injury to feelings as a result of discrimination suffered. The award is in addition to any award for financial loss and can be significant, often making up over 50% of the overall compensation awarded by the Tribunal to a claimant.

When assessing the level of an injury to feelings award, Tribunals have followed the guidance set out by the Courts in 2002 and subsequently in 2009. Broadly, there are three bands of compensation designed to reflect the severity of the discrimination, known as "Vento" bands, after the 2002 case. The precise extent of these bands has become confusing due to uncertainty over whether the bands should be increased by inflation, and whether they should be uplifted by 10% in line with a decision of the Court of Appeal in 2012.

This uncertainty was more or less settled by the Court of Appeal earlier this year, when it recommended that the President of the Employment Tribunals issue guidance on the calculation of injury to feelings and personal injury awards, taking into account the 10% uplift and any inflationary increases. That guidance has now been published after a short consultation and, to illustrate how the bands have increased, the below table shows the new bands set out in the Presidential Guidance, in contrast to the bands which applied in 2009: -

Bands from 2009 New bands from 11 Sept 2017
Lower Band Less serious cases such as where the act of discrimination is an isolated or one off occurrence £600-£6,000 £800-£8,400
Middle Band For serious cases which do not merit an award in the highest band £6,000 - £18,000 £8,400-£25,200
Top Band

For the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment

£18,000-£30,000 £25,200-£42,000

The awards can exceed the top band in the most exceptional of cases.

The new bands will apply to claims made on or after 11 September 2017. For claims before that date, it will be open to Tribunals to adjust the bands in accordance with inflation, and the Guidance sets out the methodology for doing so. In Scotland, there is also specific provision for the 10% uplift in claims, which is discretionary for the Tribunal to apply.

The Guidance will be reviewed and, if necessary, amended in March 2018 and annually thereafter. Any new guidance will come into effect on 6 April each year.

Should employers fear discrimination claims?

For employers in the UK, given this uplift, together with the scrapping of tribunal fees, it may feel as if the Autumn is bringing in a more onerous employment regime. However, to place these increased awards in perspective, it's worth appreciating that despite media reports of five and six figure awards, the average overall award for discrimination cases is not as high as many people might think. For example, although the highest sex discrimination award in 2015/16 was just over £1.7 million, the mean and median awards were much lower – in 2015/16, the median award for sex discrimination was £13,500 and the mean, £85,622. This is despite there being no statutory limit on compensation for discrimination.

The injury to feelings awards mostly fall into the lower and middle Vento bands and often make up around half of the overall award. There are no official figures showing the split between financial award (loss of earnings), injury to feelings and aggravated damages (ie damages over and above the Vento bands awarded in the most serious cases where the behaviour of the respondent has aggravated the claimant's injury). However, some analysis has been done by the Equal Opportunities Review which for a number of years analysed the data from cases. Figures from 2012 to 2014 show that approximately 2/3rds of injury to feelings awards were in the bottom Vento band, 1/3rd third in the middle band and only a few cases falling in the top band. By 2014 these proportions had changed to a more even 50/50 split between the lower and middle bands, and by 2015 there was an upward trend in awards in the high and middle bands.

It is still uncommon to hear about awards in the top Vento band, but this could be misleading since cases involving the most serious type of discrimination present the greatest reputational risk to employers so are more likely to be settled out of court on a confidential basis. However, to focus solely on the size of the potential award is really missing the point since any HR manager who has dealt with a discrimination claim will know that they can be very costly in terms of management time and potential reputational damage. Avoiding them altogether is by far the best strategy.

If your organisation were to find itself subject to an Employment Tribunal claim, it would need to demonstrate that it has appropriate policies in place; that employees are aware of them; and that training has been provided to managers to enable them to effectively implement and enforce the policies.