The new Enterprise and Regulatory Reform Act 2013 gives tribunals the power to impose financial penalties on employers when they breach a worker’s rights and there are “aggravating features”, which means that the employer has done something particularly bad or wrong.
The penalty will be 50% of any award made to a Claimant, with a maximum cap of £5,000. Much like parking fines, a 50% reduction is granted if it is paid within 21 days. The government has now confirmed that this piece of legislation is likely to be implemented in April 2014.
The financial penalties for employers were proposed at the same time as tribunal fees by the government, supposedly as a way of ‘balancing’ the rights of employers and employees. However, unlike the tribunal fees, which were implemented on 29 July 2013, the government has been silent about the financial penalties provisions until now.
Organisations such as trade unions have not been happy about the delay so they will be pleased that this measure is now going to be put into force.
Kate Fretten, Employment Partner, says “Employers will have to be careful going forward as they may find they have to pay an extra £5,000 on top of any damages if they lose in the tribunal. However, the penalty itself will go towards funding the tribunal service, not to the Claimant.”
At Frettens, all of our solicitors offer a free initial meeting to chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and Kate or Paul will be happy to discuss it with you.