It’s a race to the finish line for the government to pass the Small Business, Enterprise and Employment Bill 2015 before the dissolution of Parliament at the end of this month. One of the Bill’s sections would insert a financial penalty for failure to pay sums ordered by employment tribunals into the Employment Tribunals Act 1996. This penalty aims to undo the mischief caused by over half of tribunal awards reportedly not being paid in full to successful claimant employees.
The proposed procedure for both unpaid tribunal awards and settlement amounts (including interest) would commence when the time for appealing awards expires. Employers would first be issued with a “warning notice”, giving them 28 days to pay up or explain why they cannot pay, after which a “penalty notice” would be issued, requiring them to pay a financial penalty of 50% of the unpaid relevant sum (a minimum of £100 and maximum of £5,000). Speedy payment, within 14 days of the penalty notice, of the original award and the penalty would reduce the penalty by 50%: a true carrot and stick method. Employers would be well advised to review and pay any outstanding awards against them now, before this proposed legislation comes into force and unpaid amounts start to balloon.
For more information on this or any employment law issue, please contact a member of our employment team.
Posted on March 9, 2015