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Unpaid awards and settlements - penalty notices

The government is intending to bring the new 'unpaid award penalties' into force from April 2016. The government will issue a 'warning notice' if any awards or settlements remain unpaid. If the monies remain unpaid, then the employer will be subject to a 'penalty notice' of 50% of the outstanding amount, subject to a £100 minimum and £5,000 maximum. The money is payable to the Secretary of State, not the employee.

This is additional to the financial penalty which has been payable in claims presented after April 2014, where 'aggravating features' exist, when a tribunal can order the employer to pay an additional 50% (subject to the same maximum and minimum).

Comment

Employment Solicitor Chris Dobbs adds, "This new penalty is the government’s response to complaints that have been raised for several years, regarding the non-payment of tribunal awards and settlements. Statistics show that nearly 50% of awards and settlements are not paid by employers and enforcement is often slow and unsuccessful. It is hoped this new penalty will encourage employers to pay more quickly and we would certainly advise employers to do so."

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