Law Report: No limit to discrimination award: Marshall v Southampton and South West Hampshire Area Health Authority. European Court of Justice, Luxembourg, 2 August 1993

Financial compensation for the loss and damage sustained by a person as a result of discriminatory dismissal must achieve the objective of restoring equality of treatment for men and women as regards working conditions. Such compensation must be full reparation of the loss and damage sustained and may not be limited by a fixed upper limit or by excluding the award of interest on compensation.

The European Court of Justice answered three questions referred to it by the House of Lords.

The ECJ decided in 1986 that the termination of Miss M H Marshall's employment constituted unlawful discrimination on grounds of sex: (1986 ECR 723. Miss Marshall claimed compensation under section 65 of the Sex Discrimination Act 1975, which limited an award to pounds 6,250.

An industrial tribunal held that the limit rendered the compensation inadequate and in breach of article 6 of Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards working conditions. It assessed her financial loss at pounds 18,405, including pounds 7,710 for interest.

THE EUROPEAN COURT OF JUSTICE said that the questions put by the House of Lords asked whether it followed from the Directive that a victim of sex discrimination on the part of an authority which was an emanation of the State was entitled to full reparation for the loss or damage he or she had sustained and whether article 6 enabled such a person to contest the applicability of national legislation which was intended to give effect to the Directive but set limits to the compensation recoverable.

The fundamental problem was therefore to determine the meaning and scope of article 6 having regard to the principles and aims of the Directive.

Each member state to which a Directive was addressed was required to adopt, in its national legal system, all the measures necessary to ensure its provisions were fully effective, in accordance with the objective pursued by the Directive, while leaving to the member state the choice of the forms and methods used to achieve that objective.

The purpose of the Directive here was to put into effect the principle of equal treatment for men and women as regards the various aspects of employment, in particular and including the conditions governing dismissal. Article 6 put member states under a duty to take the necessary measures to enable all persons who considered themselves wronged by discrimination to pursue their claims by judicial process. The measures should be sufficiently effective to achieve the objective of the Directive and be capable of being effectively relied on by persons before national courts.

The objective was to arrive at real equality of opportunity and could not be attained in the absence of measures appropriate to restore such equality when it had not been observed. Those measures must guarantee real and effective judicial protection and have a real deterrent effect on the employer.

Where financial compensation was the measure adopted to restore a situation of equality, it must be adequate in that it must enable the loss and damage actually sustained as a result of the dismissal to be made good in full in accordance with the applicable national rules.

The fixing of an upper limit could not constitute proper implementation of article 6, since it limited the amount of compensation a priori to a level which was not necessarily consistent with the requirement of ensuring real equality of opportunity through adequate reparation for the loss and damage sustained as a result of discriminatory dismissal.

Full compensation could not leave out of account factors such as the effluxion of time. The award of interest in accordance with national rules must be regarded as an essential component of compensation for the purposes of restoring real equality of treatment.

A person who had been injured as as result of discriminatory dismissal might rely on article 6 as against an authority of the State acting in its capacity as an employer in order to set aside a national provision which imposed limits on the amount of compensation recoverable by way of reparation.

Ying Hui Tan, Barrister