Straw to get tough on employers that fail to pay damages claims

Tough measures to force employers to pay damages awarded against them by employment tribunals have been promised by Justice Secretary Jack Straw.

“I am determined to ensure that employees awarded settlements following a dispute get their dues paid,” he said.

“Ministry of Justice research shows as many as four out of 10 employers are not paying up, leaving individuals with money owed to them, which is completely unacceptable, especially if they have lost their job.”

The MoJ research, undertaken by IFF Research, polled 1,002 claimants and found the following:

  • Of 93 claimants who were awarded less than £500, 26% did not receive any payment at all.
  • Of 497 claimants who were awarded between £500 and £4,999, 40% did not receive any payment.
  • Of 377 claimants who had been awarded more than £5,000, 44% did not receive any payment.

Overall, 39% of those polled who had been granted awards had not been paid, while 53% had been paid in full. The research also found 49% of very small employers – with up to nine employees – failed to pay anything at all, compared with 16% of employers with 250 or more staff. Some 78% of employers with 250 or more staff had paid in full, compared with 51% of those with 10 to 49 employees.

Some 36% of claimants polled who had not been paid had tried to enforce the award through a county court, while 40% of unpaid claimants did not know they could do this.

As for respondents’ legal representation at tribunal or court, 58% said they were represented by a solicitor or lawyer, 16% by the Citizens’ Advice Bureau, 12% by a trade union, 9% by a friend or family member, 3% by an employment rights advisor and 1% by Acas.

Straw said high court enforcement officers (HCEOs) will be given powers to recover awards granted by employment tribunals or in out-of-court settlements.

As of November last year there were 63 HCEOs handling a wide range of court enforcement work. The MoJ said it will be “encouraging as many officers as possible to take up this work”.

The HCEOs will have the power to seize and sell respondents’ goods to cover debts and costs.

TUC general secretary Brendan Barber said: “Rogue employers should no longer be able to avoid punishment for mistreating their staff.”

The MoJ said it had opened a telephone helpline to advise those pursuing unpaid tribunal awards. It will also send out leaflets to claimants containing similar advice.

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