Businesses 'falling victim' to compensation culture

UK businesses are falling victim to a 'huge compensation culture' which is being promoted at industrial tribunals, according to the Forum of Private Business (FPB).

The business group was reacting to a new report from the Equal Opportunities Review journal, which revealed that compensation awards for discrimination rose by 44% to £6.2m during 2004.

While the total number of awards for sex, race and disability discrimination in the workplace actually fell, the amount awarded by tribunals rose in all three areas. Disability discrimination awards saw the largest increase, with the average payout rising to £28,000.

Nick Goulding, FPB chief executive, said, 'Unfortunately, industrial tribunals seem to have become even more complex than courts of law and employers are falling victim to the practice of exploiting political correctness for financial gain'.

The FPB is calling for a return to the 'original principle' that industrial tribunals should be an informal way to resolve employment issues instead of going to court.