Workplace rights: Capping payouts for discrimination

Employment tribunal litigation is at a record level following an increase in claims in 2009/10...

by Michael Burd and James Davies, Lewis Silkin LLP solicitors, email:
Last Updated: 06 Dec 2010

Discrimination claims, on the grounds of race, age or sex, for example, account for a significant proportion, prompting the CBI to propose the reinstatement of a cap on compensation to 'help curb unrealistic expectations of awards'. The former £11,000 limit was scrapped in 1993 after the European Court ruled it failed to provide an effective remedy. However, the median award for unlawful discrimination was a mere £7,806 last year. Nonetheless, the CBI believes claimants can be 'dazzled by coverage of multimillion-pound City awards'. It suggests a cap of £65,300 (mirroring the limit for unfair dismissal) or twice annual salary, whichever is greater. That would probably comply with EU law, but would the desired effect be achieved? It might deter a few weak claims, but if 'salary' included bonuses there could still be six or seven-figure awards in City cases - with commensurate dazzling headlines.

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