Factual and Procedural Background
This appeal concerns a decision by an Employment Tribunal regarding compensation quantum following a finding of racial discrimination. The Employment Tribunal had previously determined liability after a four-day hearing, dismissing claims of constructive dismissal and discrimination against one employer (Company B) but finding in favor of the Plaintiff against another employer (Company A) for racial discrimination. The Plaintiff was awarded compensation for injury to feelings and financial loss. Company B was later removed from the proceedings. The Plaintiff appeals only the quantum of compensation awarded by the Tribunal, arguing that the Tribunal applied an incorrect test regarding compensation for psychological injury caused by the discrimination. The appeal was allowed to proceed to a full hearing by the Employment Appeal Tribunal (EAT).
The factual background as found by the Employment Tribunal is that the Plaintiff, a Welsh individual of Somali ethnicity and a professional boxer, was employed as a labourer on a construction site managed by Company A and Company B. Shortly after starting work, the Plaintiff suffered racially abusive insults from a foreman employed by Company A. The abuse caused significant distress, leading to psychological harm, including depression and a marked personality change, which affected his professional and personal life. The Plaintiff complained, but felt his concerns were not taken seriously, and subsequently left the site under distressing circumstances. The Employment Tribunal found Company A liable for racial discrimination, rejecting claims against Company B.
Legal Issues Presented
- Whether compensation for losses suffered due to racial discrimination requires that such losses be reasonably foreseeable, or whether it suffices that the losses are causally linked to the discriminatory act.
- The adequacy of the compensation awarded for injury to feelings.
Arguments of the Parties
Appellant's Arguments
- The Employment Tribunal applied the wrong test by requiring that psychological injury be reasonably foreseeable to award compensation.
- Compensation should be awarded if there is a causal link between the discriminatory act and the injury, regardless of foreseeability.
- Reliance was placed on the dictum of Stuart-Smith LJ in a Court of Appeal case indicating that causation, not foreseeability, governs compensation for injury caused by statutory torts of discrimination.
- Support was also sought from a decision of the European Court of Justice emphasizing that compensation must be adequate to make good the loss fully.
- Psychological injury is a type of harm the statute intends to protect against, and the statutory tort is one of strict liability.
Respondent's Arguments
- The Plaintiff must prove that the loss was caused by the discriminatory act and that the loss was of a kind the statute intended to prevent.
- The loss must be reasonably foreseeable as a result of the unlawful act to recover compensation.
- Once the kind of loss is established, the full extent of loss can be recovered even if not fully foreseeable.
- Psychological harm must be reasonably foreseeable to warrant compensation for injury to health.
- The Plaintiff's extreme reaction was irrational and self-inflicted to an extent, and the Tribunal's findings that the Plaintiff failed to mitigate his loss were correct.
- Damages must "fit the crime," and there is no reason to award compensation for unforeseeable psychological harm when injury to feelings and aggravated damages are already recoverable.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Hurley v Mustoe (No. 2) [1983] ICR 422 |
Compensation under statutory tort represents the full measure of damages recoverable in tort for unlawful discrimination. |
Referenced to support the nature of damages recoverable under the Race Relations Act. |
| Coleman v Skyrail Oceanic Ltd (t/a Goodmos Tours) [1981] IRLR 398 |
Compensation for foreseeable damage directly caused by unlawful discrimination; foreseeability governs recoverable pecuniary loss. |
Considered but noted as not addressing remoteness and causation in statutory tort in full; dicta seen as contradictory. |
| Sheriff v Klyne Tugs (Lowestoft) [1999] ICR 1170 |
Damages for racial discrimination include personal injury; causation is key rather than foreseeability for statutory torts. |
Preferred by the court for establishing that compensation should be awarded for losses directly caused, even if unforeseeable. |
| Marshall v Southampton and South-West Hampshire Area Health Authority (No. 2) [1993] IRLR 445 |
Compensation must be adequate to fully make good loss and damage sustained due to discriminatory dismissal. |
Referenced but found of limited assistance on remoteness issues, leaving such matters to national rules. |
| McConnell v Police Authority for Northern Ireland [1997] IRLR 625 |
Proper practice is to make a single award including aggravated damages in discrimination cases. |
Applied to conclude the Tribunal's award for injury to feelings was within an appropriate range and no separate aggravated damages award was needed. |
Court's Reasoning and Analysis
The court examined statutory provisions under the Race Relations Act 1976, particularly sections 54, 56, and 57, which establish the statutory tort of racial discrimination and the framework for awarding compensation. The court noted conflicting authorities regarding whether damages must be reasonably foreseeable or merely causally linked to the discriminatory act. It observed that while the Court of Appeal in Coleman v Skyrail emphasized foreseeability, the dicta in Sheriff v Klyne Tugs favored a causation standard without the foreseeability requirement for statutory torts.
The court considered submissions from both parties and relevant legal textbooks, concluding that the statutory tort under section 54 is intended to protect against all forms of racial discrimination and consequent injury, including psychiatric injury. Given this purpose, the court preferred the approach in Sheriff v Klyne Tugs that compensation should be payable where harm is directly caused by the discriminatory act, regardless of foreseeability.
The court found that the Employment Tribunal erred by applying the wrong test—requiring reasonable foreseeability of psychological injury for compensation. It held that the Tribunal should reconsider compensation based on whether the psychological injury was a direct result of the discrimination, considering any intervening causes or mitigation by the Plaintiff.
Regarding the award for injury to feelings, the court found the sum of £5,000 appropriate, noting the insult was a one-off incident followed by an apology and that the award was for injury to feelings alone, excluding psychological injury compensation.
Holding and Implications
The court allowed the appeal in part, holding that compensation for psychological injury caused by racial discrimination under the Race Relations Act 1976 does not require the injury to be reasonably foreseeable but only that it be causally linked to the discriminatory act.
The case was remitted to the Employment Tribunal to reassess the quantum of compensation with regard to the direct causal link of psychological injury, any intervening causes, and mitigation of damages.
The court upheld the original award of £5,000 for injury to feelings, finding it within an appropriate range and rejecting the need for a separate award of aggravated damages.
This decision clarifies the applicable test for compensation quantum in statutory torts of discrimination, emphasizing causation over foreseeability for psychological injury claims, but does not establish a new binding precedent beyond the facts of this case.