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Employers: why changes to injury to feelings awards could hurt your bottom line
Getting straight to the point, recent changes to injury to feelings and personal injury awards will be a blow to the bank balance for employers! The majority of injury to feelings claims that small and medium-sized business face would now be worth up to £25,000 rather than £18,000 which is an increase of almost £7,000.
This article covers the changes effective from 11th September 2017, and the possible impact this could have on businesses.
The 10% increase in awards for injury to feelings and personal injury in Employment Tribunals (ETs) follows the Court of Appeal ruling in De Souza. The change was to avoid disparity between the approach of the Civil Courts and the Employment Tribunals (ETs) and the presidents of the ET in England, Wales and Scotland have now increased the bands used to ‘calculate’ injury to feelings awards.
Previous award bands for injury to feelings
Injury to feelings awards are made by ETs in discrimination cases to compensate a claimant for the respondent’s discriminatory behaviour. Unlike claims where a claimant can demonstrate the financial losses they have suffered, compensation for discrimination was previously very difficult to calculate.
The case of Vento in 2002 provided guidance for injury to feelings awards and suggested a banding system as follows:
- For less serious cases e.g. one off or isolated incidents £500 – £5,000
- For more serious cases that do not warrant a higher award £5,000 – £15,000
- For the most serious cases £15,000 – £30,000
The ETs followed this guidance until Da’Bell in 2009 when the Employment Appeal Tribunal (EAT) revisited and amended the bandings as follows:
- For less serious cases e.g. one off or isolated incidents £500 – £6,000
- For more serious cases that do not warrant a higher award £6,000 – £18,000
- For the most serious cases £18,000 – £30,000
Since 2009, ETs have been exercising discretion within the above guidelines basing each award on the facts of the individual case.
What does the new 2017 band for injury to feelings mean for employers?
Small and medium-sized business are most likely to come across cases in the category covering more serious cases that do not warrant a higher award; the band in which the rise in the award is almost £7,000. This increase could cause real financial harm to the bottom line of any business affected.
Using the previous Vento guidelines, the presidents of the ET have calculated (using the RPI All Items Index) new bands taking into account inflation over the last 15 years. The new bands for injury to feelings awards as of 11th September 2017 are:
- For less serious cases e.g. one off or isolated incidents £800 – £8,400
- For more serious cases that do not warrant a higher award £8,400 – £25,200
- For the most serious cases £25,200 – £42,000
- Exceptional cases £42,000+
These new awards will affect claims issued on or after 11th September 2017 and will be reviewed by the presidents of the ET in March 2018, and then annually. Any yearly changes will affect claims issued on or after 6 April of that year.
What can businesses do?
Businesses affected by a claim for injury to feelings on or after 11th September will be subject to the increase in awards. Businesses which are not affected can put in place preventative measures to reduce the risk of injury to feelings claims – contact an experienced employment law professional for guidance.
If you would like advice about how this decision could impact on you, or have a specific situation that you would like to discuss before it escalates, please contact our experienced employment team for a free, no-obligation discussion about your situation.
The author, Nicola is one of our employment law specialists who represents claimants and respondents in Employment Tribunal claims, advises individuals and small and medium sized businesses about procedures, procedures and contracts.
De Souza v Vinci Construction (UK) Ltd  EWCA Civ 879
Vento v Chief Constable of Yorkshire Police  EWCA Civ 1871
Da’Bell v NSPCC  UKEAT 0227_09_2809