Tribunals (Maximum Compensation Awards) Bill

David Nuttall Excerpts

Friday 17th June 2011 Commons Chamber

[Mr David Nuttall (Bury North) (Con)]

May I help my hon. Friend on that point? I suspect that no accurate figures are available because many of these claims are resolved before the application is put to the industrial tribunal. Although figures will be available for those withdrawn or settled after the industrial tribunal proceedings began, I suspect there will be many thousands of other cases that the public do not know about.

[Mr Chope]

To put the issue in context, I will quote briefly from some newspapers. On 24 October 2008, the MailOnline had the headline “Asian bank worker gets record £2.8m race discrimination payout”. On 10 September 2009, another headline read: “Sacked council manager wins £1 million age discrimination payout”,

and a report has come out in the past few days saying:

“Discrimination compensation payouts hit an all time high.

A recent annual survey of compensation awards in the Equal Opportunities Review has revealed that the amount being paid out by employers in discrimination cases has more than doubled in two years.”

--- Later in debate ---

[Diana Johnson]

Obviously, I cannot comment on the circumstances of that case. The tribunal or court that dealt with it would have considered all the issues that arose. Some dreadful discrimination cases are brought before the tribunals and courts, and tribunals do their best to make just and equitable awards that fit the circumstances that are brought before them. I dispute the idea that everybody who goes before a tribunal is awarded a huge amount of money. When people are awarded very high compensation payments, there may well be very good reasons.

May I also say to the hon. Member for Christchurch that I believe he has got the law wrong in a number of ways, particularly on wrongful dismissal? He wants to limit payments that can be made for that, but often people’s contracts of employment contain clear rights to notice. If he wants to limit those rights, he may find that he is in breach of contract. That may apply to some high earners.

I want the Minister to have an opportunity to contribute, so I will cut my comments short, but I wish to point out that at the moment there is a limit of about £68,000 on unfair dismissal compensation payments. My hon. Friend the Member for Manchester Central (Tony Lloyd) made that point. When awarding compensation for unfair dismissal, the tribunal has to make clear judgments about the immediate loss of earnings that the person has experienced, their future loss of earnings, the expenses that they have incurred, the loss of statutory rights and the loss of pension rights. At the moment, tribunals consider the range of losses to an individual and make a judgment based on that, but there is a cap of about £68,000 on the compensation.

I am interested to hear what the Minister has to say about the particular issues of sex, race and disability discrimination claims. We know from the Marshall case that European law states that it is not possible to have an upper limit for those claims, because damages should be awarded for the losses sustained.

[Mr Nuttall]

Will the hon. Lady give way?

[Diana Johnson]

I am very keen to hear from the Minister, but I will give way.

[Mr Nuttall]

Is it not the case that since the decision to which the hon. Lady refers, EU directive 2006/54/EC has recast the legal position so that there is a prohibition on the fixing of a prior upper limit to restrict compensation, and a provision that the “effective, proportionate and dissuasive” remedy should be given? I believe that a cap of £50,000 would be dissuasive.

[Diana Johnson]

That is obviously where the hon. Gentleman and the Labour party disagree. We do not think it is right to have such a cap. I would be interested to hear the Minister’s view about the European dimension to imposing a cap on sex, race and disability discrimination compensation. On the basis of what I have said this afternoon, the Opposition oppose the Bill.