Compensation awards

Research published this month by Equal Opportunities Review shows that, in
total, employment tribunals awarded 38 per cent more compensation in equal
opportunities cases in 2000 than in 1999, granting a total in aggregate of
£3.53m. The question is, what lessons can be drawn from this bare statistic?

The statistics

Although the litigation risks are clearly increasing, the detailed
statistics show interesting quirks. For example, the average sex discrimination
award was slightly down on the previous year. The median award (the average of
the highest and lowest awards) in sex discrimination cases, however, increased
substantially. There were also fewer cases for sex discrimination in which
compensation was actually awarded.

It seems, therefore, that employers are settling these claims more often
than risking a fight at tribunal. There have been a small number of cases,
however, where very substantial awards have been made. This may reflect an
increasing use of equal opportunities legislation by more highly paid women,
who have traditionally avoided the legal route in the past, due to the
perceived damage that "going legal" could do to their careers. It may
also reflect the increased number of "no win, no fee" legal
practitioners acting for applicants, which is both pushing up the level of
awards – in particular, those for injury to feelings – as well as obtaining
quicker settlements for clients (hence the reduction in cases where
compensation is awarded).

Compensation for race and disability claims on average has increased, in
both cases to more than £13,000. There is little doubt that tribunals are
becoming more bullish in the way they assess compensation awards, particularly
as no recession loomed in 2000.

The trends

One of the most significant recent trends is the increased willingness of
many workers to resort to the law. This is both a cultural issue and a
practical one, as "no win, no fee" advice becomes more widely
available. Employers should respond by updating their policies and procedures,
increasing their communication about them, and ensuring that at least all their
managers are trained in equal opportunities. Experience shows this greatly
assists employers in avoiding these types of claims arising.

Indeed, for many employers, the likelihood of equal opportunities claims
arising has been now specifically budgeted for as a potential cost for the
organisation. Similarly, due to the real risk of legal liabilities, incurring
legal costs, and potential publicity, employers are increasingly looking to be
proactive in diversity issues, and in promoting real equality of opportunity.
In the long run, this should see fewer cases coming to the tribunal.

Comments are closed.