Employment Tribunals – Value of Awards
The value of any award made by a tribunal will vary according to the nature of the case. The amount of some awards are determined by law, although even these may have some influence of the tribunal – in certain circumstances, the tribunal can increase or decrease parts of an award by as much as 25%.
Then there are awards that have to be calculated with some speculation influencing them: if an employee successfully wins a claim for unfair dismissal, and is still unemployed at the time of the hearing, the tribunal will have to judge how much longer they may be out of work, and make an award accordingly; employers could also be liable to the government, for the cost of benefits claimed, in these cases.
While the law doesn’t permit an award for ‘injury to feelings’ in most cases, discrimination cases can attract awards for these, at the discretion of the tribunal. The tribunal also has complete discretion on the amount to award in discrimination cases, so cases involving discrimination invariably attract higher awards against the employer.
The most popular claims at employment tribunals in 2008-09 were for unfair dismissal, with the highest award for this being £84,005. With more than 52,000 unfair dismissal claims accepted by the Tribunals Service, any employer will appreciate the need to avoid a successful claim if at all possible. While not all claims will be successful, and even if they are, they won’t typically cost the business that much, the risk of a claim is not something that employers should treat casually: the average award in 2008-09 was £7,959.
For cases with Race Discrimination jurisdictions, the maximum award was for £1,353,432, and the cases averaged an award of £32,115.
Cases including Sex Discrimination jurisdiction attracted an average award of £11,025, with the maximum award made for £113,106.
Disability Discrimination cases settled by the tribunals included a case awarded £388,612, averaging £27,235.
Religious Discrimination cases included a case awarded £24,876, with this averaging £10,616.
For cases with Sexual Orientation Discrimination jurisdiction, the maximum award handed down was for £63,222, and these cases averaged awards of £23,668.
Cases with Age Discrimination included a case awarded £90,031, awards averaging £8,869.
Costs were awarded in 367 cases, and the majority (72%, 265 cases) of these were to the Respondent. The maximum awarded was for £25,000, although the average was for only £2,470.
Given these last figures, it’s quite clear that even if an employer was successful in defending their claim it is likely that they will be at a loss. For those not facing a claim today, good employment policies & relations will help keep claims from employers to a minimum, whereas If your business is in the process of defending an employment tribunal, efforts should be put into keeping your losses to a minimum. Contact Employment Law Clinic (see below) to discuss how we can be of assistance.
Minimising Compensation Awards
A tribunal can increase some awards by up to 25% – where the employer has not followed the ACAS Code of Practice for Disciplinary & Grievance Procedures.
Where an employer recognises their case will involve a compensatory award, this should be paid to the employee in advance of the tribunal award wherever possible. The effect of this will be that the tribunal cannot make an award for this amount, and therefore cannot increase this by up to 25% – saving the employer from this element of any compensation. If this option is being considered though, ensure you consider the case of The University of the Arts London v Rule when determining how & when to make any payment.