Governments consider capping discrimination payouts

The government is considering capping payouts for discrimination as part of a drive to reduce red tape. The review is part of employment regulation review proposals that “will boost jobs in the private sector”, by making it easier for businesses to be more “flexible” and aiding “job creation”.

Currently payouts recived for proven discrimination are unlimited. Employers argue that they are forced to settle of out of court because of the unforeseen costs regardless of cases being weak or strong. They say the current system proves as an incentive for bringing weak claims forward. However the Trade Union Congress (TUC) argue that employer claims about myriad vexatious claims are the equivalent of an urban myth, the TUC also point out that high payouts are only awarded in severe cases.

Most employment lawyers will tell you that taking a discrimination case is not easy, firstly no employer is going to admit discrimination, and witnesses are often reluctant to come forward. Then there is an indefinite period of being out of work, which can be up to two years before a case is heard. If you are on a low income you will also have to consider that you will not get legal aid for representation for your eventual tribunal hearing. Can employers really argue most discrimination claimants are opportunists?

Leading family charity Working Families argue they are most certainly not. The charity operates a helpline for parents who fear they may be victims of discrimination. Last year Working Families helped over 200 parents with cases which raised discrimination issues (12% of their helpline callers). The charity claims that during the recession, employers appear to be flouting the law more blatantly. For example: one caller was told she could not return to the same hours of work after maternity leave: her employer told her that, as she had been on leave, she had “drawn the short straw” and had to do the shifts that no one else wanted.

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Sarah Jackson, Chief Executive of Working Families argues discrimination pay outs should remain unlimited, considering the loss of earnings and potential earnings that result from the complete breakdown of an employment relationship. She comments:-

“The Government admits that the high cost of compensation in discrimination cases is a concern for employers – so it should be. If we are serious about tackling discrimination at work – which continues to be an issue for many callers to Working Families helpline – then the sanctions need to be severe.”