In the 2013 study by the Department for Business Innovation and Skills (BIS) (now re-named the Department for Business, Energy and Industrial Strategy) (BEIS) on Payment of Tribunal Awards, only around 49% of successful claimants had been paid the compensation awarded by an employment tribunal in full.
In response to this staggering statistic, since April 2016 tribunal enforcement officers have been able to impose financial penalties on defaulting employers. However, little information has been available until recently on how successful the imposition of such penalties has been.
Enforcement officers can issue a ‘warning notice’ to defaulting employers stating that a financial penalty will be imposed unless an amount is paid by a set date. That date should be at least 28 days from the date of the warning notice. If the amount remains unpaid after that date, a ‘penalty notice’ can be issued for 50% of the unpaid amount. The maximum amount of the penalty is £5,000 with the minimum being set at £100. If the amount unpaid as set out in the ‘warning notice’ and the ‘penalty notice’ are paid within 14 days of the ‘penalty notice’, the penalty payable is reduced by 50%.
Following a written question by Parliament to BEIS, it has confirmed that 60 penalty notices have been issued following 164 warning notices and that defaulting employers have paid out £83,000 of previously unpaid awards to claimants.
The penalty regime can also be used where settlements agreed by ACAS following conciliation are unpaid.
The 2013 study found that the majority of successful claims were against small private employers with less than 50 staff and the lowest value awards (under £500) were most likely to be paid in full. Claimants who had received assistance from lawyers, unions or informal arrangements either before, during or after their initial hearing were more likely to receive payment without needing enforcement (58% compared to 53% overall).
This is a positive step in ensuring that successful claimants are paid the compensation owed and is arguably more important now that claimants have to pay between £390 and £1,200 to bring and have their claims heard.
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