Monday 6 June 2011

Cap discrimination awards at £50k, Government told

The Government has been advised to place a cap on employment tribunal awards for successful discrimination cases by an influential city group led by Sir Michael Snyder.

The group has told the Government that discrimination awards should be capped at £50,000 in order to stop spurious claims being pursued through the system to the detriment of employers.

The news is not welcome for employees, as there is currently no limit on the amount of compensation an employment tribunal can award a successful claimant if they have suffered from discrimination in the workplace. Discrimination occurs when an employee is treated less favourably than another because of their race, gender, sexuality, religion or beliefs, nationality, origin, etc.

Other employment tribunal awards are capped, for example the maximum award for unfair dismissal is £65,300. The city group wants the Government to enforce a limit on discrimination claims.

The group claims that employees without a genuine discrimination claim are trying their luck in an employment tribunal because of the possibility of an uncapped award. What happens in reality is that they are awarded a far smaller award which could have been negotiated by the parties in an out-of-court settlement. The result is that employers’ time and money is wasted in the tribunal process.

The 25-strong group also recommends making employees who lose a discrimination claim responsible for paying a proportion of their employer’s costs. The amount would not be enough to deter anyone with a genuine discrimination claim but enough to make those with a tenuous one think twice about pursuing the claim in a tribunal.

In addition, the group wants other employment tribunal awards, such as those for unfair dismissal, to be capped at £50,000.

A survey by CBI goes some way to back up the group’s position. 44% of the 330 organisations questioned said they would like to see discrimination awards capped.

The CBI survey found that claimants are ‘dazzled’ by media reports of multi-million pound awards for city workers who have been successful in their discrimination claims. The survey recommends capping discrimination awards at £65,300, the maximum award possible for unfair dismissal.

The group of city leaders is a powerful one. They meet four or five times a year and the meetings are attended by ministers, such as Business Secretary Vince Cable. Therefore it is likely their proposals for a cap will be carefully considered, and could be put into practice in the near future.

For more information on discrimination in the workplace or unfair dismissal, contact Job Justice today.

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