Employment tribunals are raising the bar on payouts for “injured feelings”, a Midland expert has warned.
Sandra Wallace, head of the equality and diversity team at law firm DLA Piper, said companies could face bills as high as £30,000.
Her comments followed the publication of the annual compensation survey by the Equal Opportunities Review (EOR), which found the amount paid out at tribunals had gone up sharply as the economy took a downturn.
It found that in 2008 employment tribunals awarded claimants a record of more than £6.5 million for unlawful discrimination, 48 per cent up on the previous year. The average award increased by 22 per cent to £17,099.
Tribunals make “injured feelings” awards according to so-called Vento bandings, dating from 2003.
Ms Wallace said: “Employers and HR professionals should particularly be aware of the growing tendency for employment tribunals to exercise their discretion in deciding levels of compensation by taking into account inflation using the RPI to calculate compensation.
“It appears that some tribunals are more inclined to do this than others.
“However, in one instance, the upper band was increased to £30,000 compared with the £25,000 stated in Vento to be the highest for worst cases.
“A further development was the award of aggravated damages made in 25 cases in 2008.”
According to the EOR, the average size of award has been skewed by two £500,000 hits – there is no cap on discrimination cases – along with the growing number of areas covered by such legislation – for example, age and religion.
Sex discrimination remained the most common – 189 awards in 2008, including eight male claimants.
“This category has also shown the biggest increase in compensation since 2007 – up 62 per cent,” noted Ms Wallace.
There were also 50 race discrimination claims in 2008, paying out nearly £1 million.