Compensation for acts of discrimination in employment is uncapped and includes an element for injury to feelings.
The recent case of Base Childrenswear Ltd v Otshudi (2019) reiterated that when assessing compensation for acts of discrimination, the key question the tribunal will consider is ‘what is the effect of the discrimination on the individual?’
O was of black African origin. She had worked to a high standard for Base for just over three months when she was called to an unexpected meeting with the Managing Director and his ‘second in command’ and summarily dismissed, supposedly on grounds of redundancy. When O questioned her dismissal, the MD reacted aggressively by calling in O’s immediate line manager to parrot the redundancy reasoning. O started to cry but was simply told to collect her belongings immediately and leave.
O promptly appealed her dismissal and raised a grievance, both of which were ignored. O then brought a claim for racial harassment.
By the time of the employment tribunal hearing, Base had changed its defence from dismissal on grounds of redundancy to dismissal on grounds that O had been suspected of theft.
The tribunal found Base was trying to cover up a dismissal tainted by consideration of O’s race and further it had jumped to conclusions about O’s involvement in the theft without investigating. The tribunal considered the dismissal was unwanted conduct and the handling of it had violated O’s dignity.
As she had less than two years’ service, O was not eligible to claim unfair dismissal but she was awarded compensation, including £16,000 for injury to feelings. This award (as well as others) was then uplifted by 25% because Base unreasonably failed to comply with the Acas Code of Practice on Disciplinary and Grievance Proceedings by failing to deal with O’s grievance.
Compensation for injury to feelings is based on three bands of loss:
- £900 – £8,800 “for less serious cases, such as where the act of discrimination is an isolated or one-off occurrence”
- £8,800 – £26,300 for “serious cases, which do not merit an award in the highest band”; and
- £26,300 – £44,000 (or higher in exceptional cases) for “the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment”.
What is clear from O’s case is that a claim related to an isolated event – e.g. dismissal, will not limit the tribunal to making an award within the lowest Vento band. The tribunal took into account various factors, including the fact that the dismissal had come out of the blue and was based on a sham redundancy, the intimidation used by management when it knew it was being untruthful, the fact that O was good at her job and had spent a considerable amount of time investing in her career and the distress and depression caused by her treatment.
Action points for employers
- Consider your reason for dismissal carefully before communicating it to your employee and keep records of your reasoned decision;
- Be mindful of the manner in which you call employees to meetings and inform them of any dismissal even if the employee has only been engaged for a short period. Keep in mind the Acas Code of Practice on Disciplinary and Grievance Proceedings as unreasonable failure to comply with it can lead to an uplift of up to 25% on an award, as in this case;
- Treat appeals and grievances seriously. Do not automatically ignore post-termination grievances, particularly if there is a risk of discrimination claims. Seek legal advice before acting; and
- Put in place and actively implement relevant policies, including for equal opportunities, disciplinary and grievance and ensure your staff and managers comply with them by providing regular training for all on those policies.
Should you have any questions on the issues set out here contact your usual adviser in the employment team or Emma McLoughlin at [email protected] or by phone on 020 8971 1088.