Claim
Rather than dwell on the case itself (it is a very long judgement involving 30 acts of discrimination – 29 of which were not upheld) which may well be subject to appeal – and the appeal outcome will likely be even more detailed, it seems timely to consider a review of the detailed and helpful interpretation guidance that the Tribunal has created which addresses or explains the many unclear and ambiguous issues created by the consultation and legislative process that brought the dramatically increased awards into effect from July 2025.
This lack of clarity and ambiguity created considerable commentary from the legal and business community expressing concerns about how the new increased limits might create significant risks and soaring costs for employers.
The following extracts from the Guidance Note represent some of the key new factors and some useful re-stating of existing principles. They are accompanied by my personal comments and speculation as to the import of the guidance. It is safe to assume that the volume of Claims, especially discrimination claims will increase in 2026. Employers need to be aware of how the new regime is to be interpreted and the consequent risks.
OUR THOUGHTS ON SOME ELEMENTS OF THE GUIDANCE:
A discriminatory act which extends over a period is treated as done at the end of the period (Article 37(3)(a)).
This is important as acts which otherwise could be ruled out of time can be brought into scope for the Claim and any award (the time limit for making a claim is 8 weeks less one day).
Where an act consists of a failure to do something that failure is to be treated as occurring when the person in question decided on it (Article 37(3)(c)).
This may also be important in defining which Claims will be allowed as “in time”. For example, this guidance suggests that if the Claim complains about a failure to make a reasonable adjustment but the decision regarding that adjustment was made more than 8 weeks (less 1 day) before the date of the Claim then the Claim related to that failure, even if having an impact less than 8 weeks before the date of the Claim could be ruled as out of time.
Article 42 has been interpreted by the tribunal to mean that there can be multiple complaints of discrimination within one Claim Form. For example, if there is an act of harassment six weeks before the Claim Form is submitted and the claimant is dismissed one week before the Claim Form is submitted the tribunal can make two awards of compensation.
This was the subject of much speculation and concern following the change in the law in July, with commentators noting that businesses would not only risk facing remedies of up to £30,000 (increased from £10,000) but multiples of £30K driven by a formula underpinned by how many complaints of discrimination were upheld.
Where there is more than one respondent that is found liable for an act of discrimination the tribunal can apportion the award between the respondents.
This point was at best ambiguous if not unclear during the consultation and law drafting stages of the revised rules. There was already growing evidence of speculative Claimants and dubious ambulance chasing Representatives making Claims against not only the employer but adding long lists of individual Directors and Managers as personal Respondents and claiming the maximum award against each Respondent. This potentially helpful interpretation will render such Claims much less likely to provide the “pot of gold” that this category of Claimant anticipated. Additionally, it should dilute the bargaining position of such Claimants/Representatives when settlements are being considered (such settlements invariably being the real objective of the Claims).
Compensation for financial loss aims to put you in the same position you would have been if the act of discrimination had not happened. It could include loss of wages if you were dismissed for a discriminatory reason. You are expected to minimise (mitigate) your loss by trying to find another job. You should explain on the Claim Form how your claim for financial loss has been calculated. When you submit your evidence for the Final Hearing you must include evidence that proves the financial loss you have suffered. For example, if you have been dismissed include evidence of what you were earning before the dismissal, any social security payments received, your efforts to find another job and your earnings since dismissal.
This is something that many Claimants are either unaware of or choose to disregard. The Tribunal is consistently robust in reducing awards to reflect mitigation factors. This can be helpful in risk management of the Claim and in forming realistic settlement positions should employers choose that route.
If you have made both an unfair dismissal and discrimination claim you will not be compensated twice for the same loss. In other words, if you receive the wages you have lost as part of the unfair dismissal compensation you will not be awarded that wage loss again as part of your discrimination compensation.
This too is something that many Claimants are either unaware of or choose to disregard. The Tribunal is consistently robust in reducing awards to reflect this stance. This can be helpful in risk management of the Claim and in forming realistic settlement positions should employers choose that route.
HURT & DISTRESS AWARDS AND THE VENTO FORMULA
Awards for hurt and distress fall under 4 headings
a. the extent to which there has been a campaign of discrimination or harassment.
b. whether the discrimination caused the person to lose his or her job.
c. the seriousness of the discrimination; and
d. the length of time that the discrimination continued.
Things that can be compensated for as hurt and distress include subjective feelings of upset, frustration, worry, anxiety, mental distress, fear, grief, anguish, humiliation, unhappiness, stress and depression.
In cases where termination of employment (dismissal or resignation) has been found to be a discriminatory act there will always be consideration by the Tribunal of a Hurt and Distress award (up to £30,000). The amount is defined by consideration of the “Vento” formula.
Where mental distress/anxiety/stress/depression are found to be relevant we may see more Claimants choosing the Royal Court route rather than the Employment Tribunal as the remedies are so much higher (see McLeod v Jersey Co-Op and an eyewatering £3 million plus award!)
The tribunal divides cases into three bands based on the UK “Vento” formula.
The top band of £20,000 to £30,000 only applies in the most serious of cases such as where there has been a lengthy campaign of discriminatory behaviour.
The middle band of £5,000 to £20,000 is used for serious cases which do not merit an award in the highest band.
Awards in the lowest band of up to £5,000 are appropriate for less serious cases, such as where the act of discrimination is an isolated or one-off event*. In appropriate cases the tribunal may award no compensation or a nominal amount.
There is considerable flexibility in each band allowing the tribunal to fix fair, reasonable and just compensation in each case. *A single act of discrimination can lead to an award in the highest band depending on the nature of the act.
A successful claim for unfair dismissal or constructive unfair dismissal (following a resignation) which is found to have been discriminatory is very likely to land in the middle band as was seen in Francisco v SEB. Francisco (once the outcome of any appeal is known) may become an interpretation and decision that is influential in future cases.