News and Updates

Winning the battle (part 2)

With reference to our 2013 article “Winning the battle but losing the war... recovery of Tribunal awards”, we welcome the introduction of the Small Business, Enterprise and Employment Bill which had its first reading in the House of Commons on 25 June 2014.  This lengthy tome contains an array of changes to various corporate, financial services and employment legislation.  Our favourite part is the proposed provision to combat non-payment of tribunal awards.

As per our last article on this subject, only around half of all claimants who are successful at tribunal are actually paid their tribunal awards in full.  If the Bill receives Royal Assent it is intended that it will introduce a new financial penalty for respondents that fail to pay on time.

Where an employer has failed to make payment of a Tribunal award:

  • An enforcement officer will send the respondent a warning notice stating that an additional financial penalty will be imposed unless the outstanding amount is paid in full by a specified date. The warning notice will give the employer at least 28 days to pay.
  • The warning notice will explain how the amount has been calculated, the grounds on which a penalty will be imposed and the respondent's right to make representations about the payment due or its ability to pay, and how to do so.
  • If the respondent does not pay the outstanding amount within the time specified in the warning notice, the enforcement officer will issue a penalty notice requiring it to pay a financial penalty to the Secretary of State of 50% of the original award or settlement amount. The financial penalty will, however, be a minimum of £100 and capped at £5,000.
  • The penalty will be reduced to 50% if within 14 days the employer pays both the outstanding amount to the employee and the reduced penalty.

The respondent will be able to appeal to the county court against the imposition of the penalty notice on the grounds that it was issued on incorrect grounds, it was unreasonable for the enforcement officer to issue the notice, or the amount payable was incorrectly calculated.

We will be following the progress of the Bill with interest and in particular whether these provisions have the desired effect.

For further information on the issues raised in this article, please contact Helen Wyatt on 020 7925 8083 or by email at helen@spencer-wyatt.com.

+44 (0)20 7925 8080 info@spencer-wyatt.com