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Tribunal award largest compensation in discrimination case

This is a cross-posted article, originally written on the Pure Employment Law Website and has now been posted here. Please note the date on which this article was posted originally and that any information within may have changed. 

16th January 2012

The media have recently reported on a compensation award of £4.5 million made to Dr Eva Michalak, an ex-employee of the Mid Yorkshire NHS Trust. The award was for race and sex discrimination and it is thought that is the highest ever award in a discrimination case in the UK.

Dr Michalak was an obstetrician who was subject to harassment and intimidation by senior employees before and during her maternity leave. She was placed on an unreasonably long period of suspension in 2006 before disciplinary proceedings began in 2007, and eventually she was dismissed in July 2008. The Employment Tribunal considered the events leading to her dismissal as a concerted campaign to terminate her employment. As a result, Dr Michalak suffered post-traumatic stress disorder, depression and anxiety leading to a personality change, and her husband had to quit his own job to care for her and their children.

The Tribunal therefore had to consider the compensation that Dr Michalak should receive. While in unfair dismissal claims the bulk of the compensation is loss-based and a statutory cap applies (currently £68,400 but increasing on 1 February – see here), the position is very different in discrimination claims. Firstly, there is no limit on the amount of compensation that can be awarded. Secondly, although lost earnings form part of the compensation (Dr Michalak was awarded £1.1 million for loss of past and future earnings and £660,000 for loss of pension) there are other elements too which applied to Dr Michalak’s claim.

In particular, Dr Michalak received £56,000 for psychiatric injury caused by her employer’s behaviour. Many people are unaware that it is possible to claim for personal injury within a discrimination case. The benefit to a Claimant in raising personal injury in the Tribunal rather than the courts is that there is no requirement to prove that the injury was reasonably foreseeable.

Dr Michalak was also awarded £30,000 for injury to feelings. Injury to feelings awards are not the same as personal injury awards, in that there is no requirement for a medical injury (either mental or physical). The Tribunals have to be careful to ensure there is no overlap with any personal injury award. Employment Tribunals consider injury to feelings awards in bands following the case of Vento (the bands were updated for inflation in the case of Da’ Bell). The bands are as follows:

  • Top band (the most serious cases): £18,000 – £30,000
  • Middle band (cases which do not merit the top band): £6,000 – £18,000
  • Lower band (the least serious cases, such as one-off acts): £600 – £6,000
  • The Tribunal have a wide discretion when it comes to the level of injury to feelings awards. The size and resources of the employer are irrelevant – it is all about the effect on the Claimant. Here, the Tribunal obviously considered Dr Michalak’s case merited the maximum award for injury to feelings.

The Tribunal also awarded £4,000 as exemplary damages – awards of exemplary damages are rare, and are designed to punish an employer in limited circumstances including where there has been “oppressive, arbitrary or unconstitutional action by servants of the government”. Here, as Dr Michalak was employed by the NHS, and because the behaviour of the Trust had been so extreme, the Tribunal were able to make this award.

The total compensation awarded to Dr Michalak was uplifted by 15% to take account of the Respondent’s failure to comply with the statutory grievance procedure which applied at the time (now replaced by the ACAS Code of Practice, which permits an uplift of up to 25%). The Tribunal said that they felt that they would have gone for a 50% uplift, were it not for the size of the award already.

The total award was also ‘grossed up’ to take account of the tax that Dr Michalak would have to pay on the award.

This case represents the very highest end of the scale. To put this in context, the average awards for discrimination reported in 2010/2011 were between £8,515 (for religious discrimination) and £14,137 (for disability discrimination). However, this does not include the average award for age discrimination which was much higher than any other type of discrimination at £30,289.

While this case may be an extreme example, it is a reminder to employers about the importance of avoiding discrimination in your workplace. Is your equal opportunities policy up to date? Have your staff had recent equal opportunities training? If not, then we can help – why not give us a call!