Employers failing to pay tribunal awards
Labour & European Law Review Weekly Issue 344 06 November 2013
Government research published last week has found that more than half of successful tribunal claimants do not receive their award in full, often because employers simply refuse to pay up.
However, claimants who received help from lawyers, unions or family and friends either before, during or after their initial hearing were more likely to receive payment without needing to enforce the award (58 per cent compared to 53 per cent overall). Almost half (47 per cent) of claimants received help to prepare their case or to speak during the hearing.
The study, Payment of Tribunals Awards 2013, found that:
- 51 per cent of claimants who had been granted an award had not been paid in full, with a further 16 per cent who had only been paid in part
- a third of claimants had not received any money at all, even after taking enforcement action
- Of those who were not paid their award without resorting to enforcement, almost half (46 per cent) pursued enforcement through the courts
- claimants with larger award values (over £5,000) who were not paid their award were more likely to report that the company had become insolvent or ceased trading (46 per cent compared with 35 per cent of those with awards under £5,000)
- The reason most commonly given for non-payment was that the company no longer existed/had become insolvent or otherwise ceased trading (37 per cent). One in three claimants whose award was not paid stated that the employer had refused to pay, and 17 per cent were unable to locate the employer
- The main reason given by claimants for not using enforcement to pursue their award was lack of awareness. Overall, only 41 per cent of claimants said that they were aware of the options open to them if their employer did not pay their award.
The findings from the study have prompted the government to consider new powers so that rogue employers cannot continue to get away with not paying.
Employment Relations Minister, Jo Swinson, has said that the coalition will consider making changes to employment tribunal rules to give judges the power to demand deposits from businesses who they think might not pay up.
She also said the government would look at using fixed penalty notices for late payment and naming and shaming employers who fail to pay up, as well as any action it can take to make sure people get their employment tribunal award when a company has stopped trading.
The study was carried out by market research firm, IFF Research, who spoke to over 1,000 successful tribunal claimants between May and June 2013.
Emma Game from Thompsons Solicitors said:
“Any proposal to rectify the unfairness caused to employees and workers is one that is to be welcomed. Whether it will have the desired effect however will have to be seen. We should also not forget that this is only a small step towards remedying the injustice that workers now face when pursuing Tribunal claims under the new regime.”