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Increase or decrease in compensation

Employers are expected to comply with the principles set out in the Acas code of practice on disciplinary and grievance procedures when handling disciplinary and grievance situations. The code, which came into force on 6 April 2009, provides basic practical guidance to employers, employees and their representatives. Where there has been an unreasonable failure by either party to comply with the code in a relevant case, the tribunal may increase or decrease compensation by up to 25%, depending on which party is at fault (see Termination of employment > Unfair dismissal).

In Local Government Yorkshire and Humber v Shah EAT/0587/11 & EAT/0026/12, the Employment Appeal Tribunal (EAT) held that only employees, and not workers, can be awarded a compensation uplift of up to 25% where the respondent has unreasonably failed to comply with the "Acas code of practice on disciplinary and grievance procedures".

In University of the Arts London v Rule EAT/0245/10, the EAT considered a case in which an uplift was awarded under similar, but now repealed, provisions set out in s.31(3) of the Employment Act 2002. The employer attempted to avoid the 45% uplift (possible under the previous provisions) awarded orally by the employment tribunal on a sum that at that time was unspecified, by making a direct bank transfer of the compensation subsequently agreed between the parties, but minus the uplift. The EAT stated that the sum was "paid to satisfy the judgment that had already been given. It was not paid by way of an interim payment in respect of a hearing which had not yet taken place." The EAT upheld the tribunal decision that the 45% uplift was still payable, stating that the oral judgment was an award and payment in such circumstances was "required to be accepted, not unilaterally made".

Indirect discrimination

Following the implementation of the Equality Act 2010, indirect discrimination applies to all the protected characteristics apart from pregnancy and maternity. This means that compensation may be awarded in indirect discrimination cases involving the protected characteristics of age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation.

Under the previous discrimination legislation, there were certain differences as to the circumstances in which compensation could be awarded in respect of unintentional indirect discrimination. However, the Equality Act 2010 has harmonised these provisions so that, where unlawful indirect discrimination has been established in relation to any of the protected characteristics listed above, if the tribunal is "satisfied that the provision, criterion or practice was not applied with the intention of discriminating against the complainant", it must not make an award of compensation until it has first considered whether or not to make a declaration or a recommendation.

Interest on awards

The Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996 (SI 1996/2803), as amended, provide that employment tribunals have to consider the question of interest on sums awarded as compensation without the need for an application. In respect of claims presented to employment tribunals on or after 29 July 2013, if the sum of money is not agreed, the rate of interest in England and Wales is that fixed from time to time by s.17 of the Judgments Act 1838 and, in Scotland, by s.9 of the Sheriff Courts (Scotland) Extracts Act 1892, currently 8%.

The relevant period will be from the date of the act of discrimination if the interest is on the sum relating to injury to feelings.

Where other damages or compensation are being calculated the period will usually begin with the mid-point date between the date when the first act of discrimination took place and the date of calculation of the damages by the employment tribunal.

Interest on unpaid tribunal awards will start to run if the award is not paid within a period of 14 days from the date of the decision. However, no interest is payable if the full amount of the award is paid within 14 days of the "relevant decision day", which is the date on which the relevant decision is recorded as being sent to the parties (Employment Tribunals (Interest) Order (Amendment) Order 2013 (SI 2013/1671)). 

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