Beware new additional employment tribunal penalties

News Article

New rules which came into force on 6th April 2016, under the Small Business, Enterprise and Employment Act 2015, mean that if you do not pay a tribunal or ACAS settlement award set against your company, you could face additional financial penalties.

Lara Murray, an employment law expert with Palmers, explained: “This new provision in the Act means that once a ruling has been made by the tribunal and the awards have been identified by the remedy judgment, in the event that settlement is not made, tribunal enforcement officers will issue the liable employer with a warning notice.

“If, despite the warning, the employer still does not comply with the payment demand, the tribunal enforcement officer has the power to impose a financial penalty on the employer.”

Penalties can be issued in relation to employers who fail to settle their financial liabilities such as:

  • Costs awards
  • Employment tribunal fees
  • Settlements reached through the ACAS Early Conciliation Service

This new provision also imposes certain limits to this power. The amount of any imposed financial penalty must be 50 per cent of the total amount owed to the Tribunal or Claimant.

The penalty is subject to a minimum of £100 and a maximum of £5,000. If an employer is issued with a penalty, they will be liable to the amount which they owe, as well as the amount of the penalty.

There is also a statutory provision which waives 50 per cent of the fine if the employer pays the amount owed, along with the reduced penalty, within 14 days of the penalty notice issue date.

Lara added: “These new measures build on a similar power that tribunals were granted in April 2014, where they can impose a financial penalty against employers who have breached an employee’s employment right where there are aggravating features. As with all matters relating to employment tribunals, expert legal advice and support can help to mitigate financial penalties and ensure that an employer’s interests are appropriately protected.”