Employers pay out almost £8 million in discrimination compensation

The amount employers have had to pay out for discrimination has almost doubled in two years. In 2007, the total paid was just over £4 million. In 2009 it was almost £8 million, finds Equal Opportunities Review in its most recent annual compensation survey.

The average award across all jurisdictions increased to £20,910. This is due to a record number of awards of over £100,000. There were 14 in 2009 – more than double the previous year’s six such awards and almost three times the number in 2007 (when there were four). The 2009 compensation awards include: a disability discrimination award for over £3/4 million; an award for sex discrimination of almost £1/2 million; compensation for race discrimination of £400,000; and an award of almost £200,000 for age discrimination.

“These figures show that tribunals are gaining confidence in using their powers to award unlimited amounts of compensation”, says Sue Johnstone, editor of Equal Opportunities Review. “The number of high awards has been growing. A large part of this compensation is for future loss of earnings and the high amounts reflect the current economic circumstances. Tribunals recognise the difficulty some claimants could face in gaining new employment, particularly older workers and those with disabilities.”

Interestingly, the median award has gone down – this is the amount that is the midpoint of all awards, and more accurately reflects what claimants can expect to receive. In 2009, the median across all jurisdictions was £7,806. So although the high awards have brought up the average, there was also a larger proportion of low awards than in the previous year.

One aspect of discrimination compensation is an award for injury to feelings – which is not available in relation to other employment claims, such as unfair dismissal. The Court of Appeal set three bands for injury to feelings, depending on the seriousness of the discrimination. The figures for 2009 reveal a drop in the amounts being awarded for the distress caused by discrimination, with two thirds of such awards falling into the lowest band of £6,000 or less.

“Although the limits within in each band were increased by the EAT in 2009, in line with inflation, the level of award has not seen a similar increase”, said Sue Johnstone.  “There were some particularly high awards; for example £40,000 for sex discrimination and £35,000 for disability, but the amount most often awarded was £5,000. A claimant could more typically expect to get between £3,000 and £6,000.”