Enforcement officers have recovered thousands of pounds from employers that have not coughed up after losing an employment tribunal, according to figures from the Government.
Non-payment of employment tribunal awards
Tribunal enforcement officers have been able to impose a financial penalty on defaulting employers since April 2016, but little was known about the number of penalties that officers have issued until last month.
In response to a recent written question in Parliament, the Department for Business, Energy and Industrial Strategy (BEIS) confirmed that there have been 60 penalty notices as a result of 164 warning notices for failing to comply with employment tribunal orders to pay compensation.
This resulted in defaulting employers paying out £83,000 of previously unpaid awards to successful claimants.
The penalty regime, which came into force on 6 April 2016, allows tribunal enforcement officers to impose a financial penalty that is 50% of the amount outstanding, subject to a minimum of £100 and a maximum of £5,000.
Financial penalties can also be imposed for a failure to pay a settlement sum agreed following conciliation by Acas.
XpertHR’s principal employment law editor Stephen Simpson observed: “A claimant has to fork out between £390 and £1,200 to start employment tribunal proceedings and see a claim all the way through to a hearing.”
Simpson continues: “Despite widespread media coverage of tribunal awards that run into the hundreds of thousands, the overwhelming majority of awards are relatively modest. In the light of this, the role of tribunal enforcement officers in recovering unpaid awards is likely to become increasingly important.”
Recovery regime for non-payment of tribunal awards
Where an employer fails to pay the required sum on time, an enforcement officer can issue a “warning notice” that a financial penalty will follow unless a specified amount is paid by a set date, at least 28 days from the warning notice date.
Where the employer fails to comply with a warning notice, the enforcement officer may issue a “penalty notice” imposing a financial penalty, which will be 50% of the unpaid amount, subject to a £100 minimum and £5,000 maximum amount.
If the employer pays the outstanding amount and the financial penalty within 14 days of the issue of the penalty notice, the penalty payable is reduced by 50%.