A report by the Equal Opportunities Review states that the total amount of compensation awarded in discrimination cases was £8,774,403 – over £3.5million more than the amount awarded in 2010.
Unlike unfair dismissal claims, in discrimination cases, compensation is potentially unlimited and covers both financial losses and so called “injury to feelings”.
The dramatic increase in discrimination pay-outs paid out by employers was largely due to two NHS cases, which resulted in massive pay-outs:
Michalak v Mid Yorks NHS
In Michalak v Mid Yorks NHS, a former NHS doctor was awarded £4.5million in compensation. In this case, the Tribunal found that Dr Michalak had been subjected to a concerted campaign intended to bring her employment to an end. They found that the Trust’s Chief Exec and HR Director (amongst others) personally liable for race and sex discrimination along with the Trust.
At the hearing, Dr Michalak produced a medical report detailing the post-traumatic stress disorder she had suffered and stating that she was highly unlikely to ever be able to return to practising medicine, such was the extent of her condition.
The Tribunal awarded her:
- £30,000 for injury to feelings;
- £56,000 for psychiatric injury;
- £4,000 in exemplary damages;
- over £70,000 for the costs of care for herself and her young son; and
- £50,000 for her medical treatment.
The majority of the award was for loss of earnings (over £940,000) and for pension loss (over £666,000).
Browne v Central Manchester NHS
In Browne v Central Manchester NHS, a former divisional director was awarded £933,155 in compensation. Mr Browne had worked in the NHS since leaving school, and had worked his way up through the ranks. Concerns were raised with Mr Browne about spending and his department’s failure to meet national targets. Mr Browne was eventually suspended and then dismissed for a breakdown in trust and confidence.
The Tribunal found that his dismissal was unfair because the reasons put forward by the Trust were “contradictory and unsatisfactory”. They also felt that the manner in which Mr Browne had been put through the capability procedure amounted to direct race discrimination and that his grievances had not been taken seriously.
Mr Browne’s evidence was that although he had never had a day off sick in 20 years, his treatment by the Trust had caused him to suffer from depression, sleeplessness and panic attacks.
The award for race discrimination, included:
- £20,000 for injury to feelings;
- £5,000 for aggravated damages;
- £13,000 for personal injury;
- over £272,000 for loss of earning; and
- over £240,000 for loss of pension rights.
The average compensation payment was also inflated by these two cases to £38,484. Excluding these cases, that rose only slightly to £15,130. Better news for employers is that the median award came down to £7,518.
Comment
Employers can relax a bit in the knowledge that massive awards are extremely rare, and that these two NHS cases involved senior employees with final salary pension rights. On the flipside, awards for loss of earnings are considerably higher than they were previously for both discrimination and unfair dismissal claims, as the Tribunals are willing to accept that it will take much longer for Claimants to get back to comparable work. The worry for employers in discrimination claims is that these sums will not be subject to the statutory cap.
The key lesson for employers is to be proactive about equal opportunities and preventing discrimination. When any issues arise, they should be taken seriously and investigated. Prompt action can often repair a situation and protect the employer’s position.
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For more employment law advice or to comment on this article, please contact Laura Kearsley, one of our employment law specialists on 0800 024 1976 or via our online form.