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Korn & Sethi: Employment Tribunal Compensation

May 2008 Update

New Compensation Rates

The annual increase in compensation limits for tribunal claims came into force on 1 February 2008.

The Employment Rights (Increase of Limits) Order 2007 (SI 2007 No 3570), which applies to dismissals on or after 1 February 2008 made the following changes:-

• A week's pay is increased to £330.00. This also applies to debts under insolvency provisions.
• The maximum compensatory award for unfair dismissal is increased to £63,000.
• The minimum basic award for defined dismissals relating to trade union reasons, health & safety and whistleblowing is increased to £4,400.
• The minimum award for unlawful inducement relating to trade union membership, activities or collective bargaining is increased to £2900.
• The minimum award for exclusion or expulsion from a trade union is increased to £6900.
• The rate of guarantee payments is increased to £20.40.

Page reference amendments

In the light of these increases amendments should be made to the following paragraphs:

• 3.41 Maximum additional award will be increased to £17160.
• 4.12 Minimum award in trade union cases will be increased to £4400.
• 4.20 Maximum basic award will be £9900.
• 5.105 A week's pay will be £330.
• 6.41 Maximum compensatory award will be increased to £63,000.
• 18.16 A week's pay will be £330.
• 18.17 A week's pay will be £330.
• 18.64 Guarantee pay will be £20.40.
• 18.199 A week's pay will be £330.
• 18.241 A week's pay will be £330. The maximum compensatory award will be increased to £63,000 and the minimum award will be £6,900.
• 18.245 A week's pay will be £330. The maximum compensatory award will be increased to £63,000 and the minimum award will be £6,900.
• 19.24 A week's pay will be £330.
• 19.25 The statutory maximum redundancy payments will be increased to £9900.

Compensation for illness in constructive dismissal cases

In Dignity Funerals Ltd v Bruce [2005] IRLR 189 (paragraph reference 10.05) the Scottish Court of Session ruled that an employee who was unable to obtain work as a result of a depressive illness allegedly caused by her dismissal could potentially recover compensation for her loss of earnings. However, it is important to stress that such loss must be a consequence of the dismissal: losses arising from a series of events leading up to "last straw" type constructive dismissal will not be recoverable. So, for example, in GAB Robins (UK) Ltd v Triggs [2008] IRLR 317 the Court of Appeal overturned the EAT's ruling that an employee was entitled to recover compensation for her loss of earnings for breaches of the duty of trust and confidence which preceded her constructive dismissal as such a loss was not a consequence of her dismissal. The Claimant was not entitled to recover compensation for "wrongs already inflicted on her" as part of the tribunal's award of compensation for unfair dismissal. It may prove difficult to apply the Court"s approach to cases where the loss of earning capacity is primarily, or substantially, a consequence of the final act which caused the constructive dismissal.

Global award for injury to feelings does not apply to separate acts of discrimination

In ICTS (UK) Ltd v Tchoula [2000] IRLR 643, the EAT ruled that it will often be appropriate for tribunals to adopt a global approach in making awards for injury to feelings (paragraph 17.42). However, such a "global" approach will only be appropriate if more than one form of discrimination arises out of the same facts or is part of an overall pattern of behaviour. Where, as in

Al Jumard v Clywd Leisure Ltd [2008] IRLR 345 complaints of different forms of discrimination (i.e. race, sex, disability) are made arising out of separate acts of discrimination, the employment tribunal should at least start by considering the appropriate award in relation to each act of discrimination. Furthermore, the EAT points out that the level of award should not necessarily be the same for different forms of discrimination as the offence, humiliation of upset may vary if, for example, the act is one of deliberate racial discrimination as contrasted with a "thoughtless" failure to comply with the duty to make reasonable adjustments under the Disability Discrimination Act. At the end of the exercise, a tribunal should stand back to ensure that the overall award is "proportionate" and that there has not been "double counting".