Laura Binnie and Jennifer Scott, in our Employment law team, discuss race discrimination and harassment and the recent case of Base Childrenswear Limited v Otshudi.
Can a one off act of discrimination still give rise to a significant award of injury to feelings? The Employment Appeal Tribunal considered this calculation in the recent case of Base Childrenswear Limited v Otshudi.
Miss Otshudi brought proceedings against her employer for race discrimination complaining of numerous acts of racial harassment and the conduct of her dismissal. She was out of time to bring a claim regarding the acts of alleged harassment by colleagues; therefore, the only potential ‘discriminatory’ act according to the employment tribunal (ET) was the dismissal itself.
After only being employed for just over three months, Miss Otshudi was summarily dismissed – apparently by reason of redundancy. She suspected that her dismissal was in fact because of her race and proceeded to challenge her dismissal. The Respondent reacted to this challenge with managerial intimidation and did not respond to the Claimant’s grievance/appeal raised regarding her dismissal.
The ET found in favour of the Claimant and during the Remedies Hearing made the following awards:
- £16,000 for injury to feelings (well within the middle band of Vento);
- £5,000 for aggravated damages to her injury to feelings based on the Respondent’s failure to respond to the grievance/appeal, initial maintenance of the lie that her dismissal was due to redundancy, failure to respond to disclosure requests and the late change in their defence that the dismissal was because of suspected theft committed by the Claimant (of which the ET found no evidence);
- £3,000 for personal injury based on the Claimant suffering from medical depression due to the dismissal; and
- £6,880 comprising of a full 25% uplift (calculated on the above awards plus interest) for the Respondent’s breach of the ACAS Code of Practice on Disciplinary and Grievance Procedures based on their failure to deal with the Claimant’s grievance/appeal.
The Respondent’s Appeal Submission
The Respondent brought an appeal to the EAT on the basis that:
- Injury to feelings should not have been placed in the middle Vento band (generally, isolated incidents are thought to be placed in the first Vento band therefore applying a lower award);
- There was an overlap between the non-pecuniary losses awards;
- The ET had double or even treble compensated elements of the claim when making awards for injury to feelings and aggravated damages which were also compensated by the ACAS uplift. The Respondent argued that the Claimant had been double compensated for their failure to respond to her grievance/appeal which was first considered in the award for the aggravated damages and again in the decision to award a 25% uplift for breach of ACAS Code of conduct;
- The totality of the awards was “manifestly excessive”; and
- The ET had taken into account matters that were irrelevant, e.g. the Claimant’s depression in their award for personal injury; the Respondent argued that the medial report referred to the effects of the dismissal and the various acts of harassment, the latter of which the ET had not allowed due to a time bar. In light of this the Respondent stated that the ET should have apportioned the award value in a ratio to reflect the depression caused by the dismissal and that caused by the acts of harassment.
The EAT Judgment
The EAT found in favour of the Claimant in respect of nearly all of the points:
- although she had experienced a one-off isolated incident of racial discrimination arising out of her dismissal, this was sufficient enough to place her injury to feelings in the middle Vento band;
- the EAT found that there had not been an overlap between the non-pecuniary losses awarded as these had been separately headed and considered by the ET;
- they did not find the totality of the awards to be manifestly excessive in light of the circumstances; and
- they did not find that the ET had taken into consideration irrelevant factors as the medical report did not provide any evidence that the depression suffered by the Claimant was attributable to the numerous acts of harassment and only relevant to the dismissal.
The only point that the Respondent succeeded on was that of double compensation. The ET had considered the Respondent’s failure to respond to the grievance/appeal when awarding the aggravated damages and when granting the 25% uplift for breach of ACAS Code. They therefore removed this element from the aggravated damages award and reduced the sum by a nominal £1,000 to a new value of £4,000.
- This case highlights that even isolated incidents of discrimination can attract high financial loss if the conduct is sufficiently serious;
- Employers should note that they will be penalised for not following the ACAS Code of Practice on Disciplinary and Grievance Procedures, which should be adhered to even in cases where an employee has less than 2 years’ continuous service, due to claims they can bring including discrimination and whistleblowing. Here, the uplift inflated the compensation from £23,000 to nearly £30,000.
A reminder that the revised guidelines for awards of compensation for injury to feelings compensation in discrimination cases are now:
- a lower band of £900 to £8,800 (for less serious cases);
- a middle band of £8,800 to £26,300 (for cases that do not merit an award in the upper band); and
- an upper band of £26,300 to £44,000 (for the most serious cases).
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