Government reforms: Financial penalties for unpaid awards

tribunal fees - stack of pound coinsWhat do we already know?

We updated you in our July 2014 Newsflash Small business, enterprise & employment bill on the Government’s plans to introduce a financial penalty for employers who fail to pay sums ordered by a Tribunal or owed under settlement agreements reached following ACAS conciliation. The planned penalty was 50% of the outstanding amount, subject to a minimum of £100 and a maximum of £5,000.

What’s new?

The Government has disclosed that the above financial penalties are likely to be effective from April 2016.

These new penalties will exist alongside the power for Tribunals to order losing employers to pay a financial penalty to the Secretary of State. These penalties were introduced in April 2014 (see our March 2014 Newsletter Spring changes – Are you ready?) and are imposed where the employer is found to have breached any of the worker’s rights to which the claim relates and that breach has “one or more aggravating features”.