New penalty for failure to pay tribunal awards

Currently there are no significant consequences if an employer does not pay the employment tribunal award owed to a successful claimant, and around half of all successful claimants never receive the amounts they have been awarded.

When passed into law, the Small Business, Enterprise and Employment Bill will allow the Secretary of State to appoint enforcement officers. These officers will have the power to send a warning notice to an employer who has not paid an award ordered by the tribunal. The notice will give the employer 28 days to pay in full, with a warning that if the award is not paid, an additional financial penalty will be imposed.

If the payment is not made by the time specified, then the enforcement officer can impose a penalty of 50% of the outstanding tribunal award (a minimum of £100 but capped at £5,000). The penalty will go to the Exchequer, not the claimant. If the employer pays the penalty and the outstanding amount due to the claimant within 14 days of the penalty notice being issued, then the penalty will be halved.

This procedure will be in addition to any measures that the claimant might take to enforce the award, such as taking action inthe County Court.

To find out how Citation can help you avoid pay tribunals please call 0345 844 1111