A recent case has set reasonable limits for injury to feelings awards in
tribunal cases. But, says James Baker, there are still serious financial
penalties for employers who treat employees badly
Are the days of compensation culture waning? In a recent case examining hurt
feelings in the workplace, the Court of Appeal has taken a stand against
decisions such as that of the Californian jury which awarded a legal secretary
$7.1m for sexual harassment. In addition to showing restraint over
compensation, the judgment recommended a tiered system for such awards, ranging
from £500 to a relatively sober maximum of £25,000, except in extreme
circumstances.
In the case concerned, Vento v Chief Constable of West Yorkshire Police (No.
2) [2003] IRLR 102, the Court of Appeal considered the amount of compensation
awarded by an employment tribunal to Angela Vento. Vento joined the West
Yorkshire Police as a probationary constable in December 1995. She had long held
an ambition to join the police force, but was unable to do so until height
restrictions were relaxed that year.
Sex discrimination
Vento was subjected to long periods of discriminatory conduct, and she was
dismissed following false allegations of dishonesty. This was perpetrated and
condoned by a large number of officers and it occurred over her probation
period. It involved character assassination, invasion of privacy, bullying,
sexual harassment, intense and unfair pressure, and finally "the destruction
of her hopes and ambitions". Her treatment led not just to the end of her
career, but to severe bouts of depression that contributed to the breakdown of
her marriage.
The employment tribunal had no hesitation in finding that Vento had been
treated less favourably than a hypothetical male comparator would have been. It
said that the chief constable and his officers had acted "in a high-handed
manner" and that their attitude was one of "institutional
denial". The tribunal awarded Vento more than £250,000 for loss of
earnings. It also awarded her £65,000 for injury to feelings (including £15,000
for aggravated damages to reflect the severity of the respondent’s behaviour)
and £9,000 for personal injury (for psychiatric damage). Finally, it awarded
her £18,015 in interest.
The Employment Appeal Tribunal substantially reduced the award. It remitted
the loss of earnings figure to the tribunal for reconsideration, and reduced
the global award for hurt feelings and personal injury to £39,000.
The Court of Appeal
The chief constable and Vento were unhappy with this decision, and appealed
to the Court of Appeal. It compared the employment tribunal’s original award to
guidelines compiled by the Judicial Studies Board. It found that the original
award of £74,000 for "non-pecuniary loss" exceeded general damages
for moderate brain damage, severe post-traumatic stress disorder, loss of sight
in one eye and reduced vision in the other, or for total deafness and loss of
speech. The Court of Appeal said that "no reasonable person would think
that excess was a sensible result". It reduced the compensation for hurt
feelings and personal injury to £32,000, but reinstated the figure for loss of
earnings.
Difficulty with feelings
The Court of Appeal said it was difficult to assess financial compensation
for an intangible wrong such as injury to feelings, as subjective feelings such
as upset, frustration, anxiety, mental distress, fear and humiliation cannot be
measured in monetary terms.
The question is how to pitch an award, so that it is not so low it fails to
deter employers from mistreating their employees, but not so excessive it is
unreasonable and seems ridiculous to the public.
The Court of Appeal drew on case law, and quoted Armitage, Marsden and HM
Prison Service v Johnson [1997] IRLR 162 which summarised the relevant
principles:
– Awards for injury to feelings are compensatory and not punitive. They
should be just to both parties. Feelings of indignation should not be allowed
to inflate the award
– Awards should not be too low, as that would diminish respect for the
policy of the anti-discrimination legislation. Society has condemned
discrimination and awards must ensure it is seen to be wrong. On the other
hand, awards should be restrained
– Awards should bear some broad general similarity to the range of awards in
personal injury cases
– Tribunals should remind themselves of the value in everyday life of the
sum they have in mind
– Tribunals should bear in mind the need for public respect for the level of
awards made.
Guidance
The court established that there are three broad bands of compensation for
injury to feelings – as distinct from compensation for psychiatric or similar
personal injury – ranging from £500-£5,000 for minor cases, £5,000-£15,000 for
serious cases, and £15,000-£25,000 for exceptionally serious and long-term
cases (see left).
So these are the sorts of awards you can expect in discrimination cases. But
is it a realistic reflection of awards across the spectrum? The most recent
annual survey of compensation awards carried out by Equal Opportunities Review,
covering 2001, reveals that the highest award for injury to feelings (including
aggravated damages) in a sex discrimination case was £40,000, and the median
award was £2,500. In race discrimination, the highest award was £17,500 and the
median £3,000. In disability discrimination, the highest award was £24,000, and
the median £3,000. In all three jurisdictions, there were more awards for
injury to feelings of less than £600 than there were of more than £20,000.
Protect yourself from claims
Of course, tribunals don’t deal with many allegations like those made by
Vento, and not all are successful. But with the prospect of awards of up to
£25,000 in severe cases of injury to feelings, on top of potentially unlimited
compensation for acts of discrimination, as well as for psychiatric injury and
aggravated damages, what can employers do to protect employees from
discrimination, and protect themselves from claims?
– Policy training Introduce proper and effective policies that make
it clear sexual harassment, discrimination and bullying are unacceptable.
Provide compliance advice and training to all employees, especially to managers
who will have to enforce the policies. It should be clear to all staff that
behaviour of this nature will be treated as a serious disciplinary offence.
– Grievance procedure Devise a grievance procedure that encourages
employees to come forward, in confidence, to make complaints. Ensure more one
person is able to deal with the grievance, in case the victim is unwilling to
discuss the problem with certain senior employees.
– Confidentiality Be prepared to protect the identity of a victim
from other employees, even if this means questioning the alleged perpetrators
without revealing the name of their accuser.
– Supervision Ensure management keeps a close eye on staff so
instances of bullying, victimisation or discrimination are not allowed to
continue. Any examples spotted should be dealt with quickly and firmly before
they escalate.
– Whistleblowing Introduce a clear and open whistleblowing policy.
Every employee has the right to "blow the whistle" to raise awareness
on matters of concern. This would include bullying, victimisation or
discrimination. Having said this, not all employees are aware of the right and
what protection the law gives them.
– Personal liability As an added incentive, remember management
and/or directors can be held personally liable for their own actions. In the
Johnson case mentioned above, both Marsden (who was one of Johnson’s
tormentors) and Armitage (the newly-appointed head of operations who failed to
identify discriminatory behaviour after conducting a disciplinary
investigation) were ordered to pay compensation to Johnson personally.
– Keep your lawyers in check If acts of discrimination have taken
place and it is too late to avoid litigation, conduct your defence reasonably.
In the Vento case, the court criticised the West Yorkshire Police for its
conduct of its defence, such as unnecessary questioning about Vento’s private
life, its "cynical offer of reinstatement designed principally to limit
the financial damage to [its] resources", its failure to apologise, and
its persistence in pursuing the case to the Court of Appeal at great financial
and emotional cost to Vento.
– Mediation? Consider mediation as an option to hearing the case in
the tribunal. This is being promoted actively by the courts as a quicker, often
cheaper and less painful way of resolving disputes.
The Court of Appeal used Vento’s claim to signal a retreat from the
multi-million dollar awards made in the US. Possibly, it also had in mind the
memorable award in 1996 of £75,000 compensatory damages and £275,000 exemplary
damages for injury to feelings and reputation to Sir Elton John, following the
devastating (and libellous) revelation that he chewed but did not swallow his
food. Doubtless Vento will not be the end of this trend, but for the time being
we can expect some restraint on awards of damages for injury to feelings.
James Baker is a solicitor with City law firm Macfarlanes
Compensation levels
High The top band should
normally be between £15,000 and £25,000 for the most serious cases, for example
where there has been a lengthy campaign of harassment. Only in the most
exceptional circumstances should an award exceed £25,000
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Medium
The middle band of £5,000-£15,000 should be used for serious cases, which do
not merit an award in the highest band
Low Awards of between £500 and
£5,000 are appropriate for less serious cases, such as where the act of
discrimination is an isolated occurrence. In general, awards of less than £500
are to be avoided
