Tribunal’s power to increase awards for injury to feelings in line with inflation

Tribunal’s power to increase awards for injury to feelings in line with inflation

Published: 6 September 2016

The case of AA Solicitors Limited v Majid [2016] UKEAT/0217/1 concerned the question as to whether the Employment Tribunal were  able to take into account the effect of inflation when making awards for injury to feelings, without having to wait for further guidance from the Employment Appeal Tribunal (EAT).

When an employee is successful in a claim for discrimination or harassment, the Employment Tribunal will make an order for compensation and this will usually include an award to cover injury to feelings.

The initial guidelines for making awards for injury to feelings was set by the leading case Vento v Chief Constable of West Yorkshire Police (No 2) [2002] EWCA Civ 1871, where the Court of Appeal set out three bands of potential awards.  The level of awards were updated by the EAT in the case of Da’Bell v NSPCC UKEAT/0227/09, in order to take into account the effect of inflation on the value of the awards. 

The Bands set out in the Da’Bell case were as follows:

Lower Band: £600 to £6000 (formerly £500 to £5,000)

Middle Band: £6,000 - £18,000 (formerly £5,000 to £15,000)

Higher Band: £18,000 to £30,000 (formerly £15,000 - £25,000)

AA Solicitors Limited v Majid concerned Ms Majid, an aspiring lawyer who was employed by AA Solicitors whilst also studying for the Legal Practice course in order to qualify as a lawyer. Throughout her employment, Ms Majid alleged 40 or more acts of sexual harassment by the firm’s sole solicitor, Mr Ali.  The acts included asking her to go out to the cinema, commenting on her figure, touching her arms, talking about installing a bed in one of the rooms at the office and similar acts and comments, all of which made her feel uncomfortable. Evidence was also submitted to the tribunal confirming Ms Majid had made several visits to the GP as a result of stress and anxiety caused by the acts of harassment.  Ms Majid first met Mr Ali on 24 April 2013 and she was purportedly made redundant in or around late May 2013.

It was held by the Tribunal that this case fell within the middle Vento Band, noting the uplift by reason of inflation.  It was also held that a 10% uplift could also be allowed on the basis of the case of Simmons v Castle [2012] EWCA Civ 1039 where the Court of Appeal increased the level of general damages in certain claims by 10% from 1 April 2013. This resulted in an increase of the banding of the award to £6,600 to £19,800. 

The Employment Tribunal upheld most of  the sexual harassment claims and made an award for loss of earnings in the sum of £2,111.40 plus interest of £9.68, compensation for injury to feelings in the sum of £14,000 and a further £4,000 plus interest of £100.34 for aggravated damages as a result of the ‘high handed, malicious insulting or oppressive behaviour’.  The tribunal selected the figure of £14,000 on the basis that in reaching that figure, it accepted Ms Majid’s evidence that ‘she always politely rejected the advances’ and the tribunal took into account all of the other circumstances, including the short duration of her employment. The remedy also included a recommendation that Mr Ali attend equal opportunities training for solicitors including sexual harassment.

AA Solicitors appealed against this ruling arguing that the injury to feelings award was excessive and that the award should have been at the bottom end of the middle band and in any event, no more than £10,000. 

The appeal was dismissed and it was held that the award was not manifestly excessive so as to justify interfering with the decision of the tribunal which had previously had the benefit of hearing all of the evidence.  The judgement also stated that Mr Ali’s conduct had violated the claimant’s dignity as a worker. 

The EAT also held that in future cases there was no need for tribunals to await guidance from the EAT or higher courts, before adjusting the bands to take into account inflation. Paragraph 23 of the Judgement of 23 June 2016 stated as follows:

If there is cogent evidence before an Employment Tribunal of the rate of change in the value of money (which could, in principle, go down as well as up), then a reasonable Tribunal acting on that evidence would be entitled without error of law to act on that evidence by adjusting the band ranges and any award for injury to feelings accordingly…’’

In light of this judgment, it is clear that tribunals do have the power to take into account inflation when assessing damages for injury to feelings and it will be interesting to note whether in future cases, Employment Tribunals will be willing to increase the figures, without recourse to the EAT or higher courts.

Employers should be aware that this ruling increases their financial exposure in respect of the payment of compensation for injury to feelings and from an employee perspective it potentially means there is an opportunity of achieving a higher overall reward of compensation.

 

Amanda Hodgson - Partner