FINANCIAL PENALTIES FOR EMPLOYERS AT TRIBUNALS: PROTECTING WORKERS OR TOPPING UP GOVERNMENT COFFERS?
The Thompsons Solicitors blog
Last week the minister for employment relations, Jo Swinson, said on Twitter that section 16 of the Enterprise and Regulatory Reform Act 2013 will come in to force from April next year.
This gives employment tribunals the power to impose financial penalties of between £100 and £5,000 on employers who breach the rights of their employees.
While we have finally got the information, its announcement on social media was not welcomed.
Section 16 of the Act adds a new clause to the Employment Tribunal Act 1996 which gives tribunals the ability to impose a financial penalty on an employer where there has been a breach of employment rights and the tribunal considers that, in the circumstances, the employer’s behaviour has one or more aggravating features.
‘Aggravating feature’ has yet to be defined but it appears that tribunals can consider the employer’s ability to pay when deciding whether or not to impose a penalty. The reality is that there are many aspects of the procedure which mean the ‘teeth’ of this legislation will be blunted.
The penalty will be set at 50% of the value of compensation payable by the employer, but if the award is less than £200 the penalty will be capped at £100. If the award is more than £10,000 the penalty will be capped at £5,000.
Incredibly, if half the penalty is paid within 21 days it will be reduced by up to 50 per cent. Why should an employer get a discount for swift payment while the claimant receives nothing extra?
Even though the penalty is awarded against an employer because of their poor behaviour towards an employee, the fine is not an additional sum paid to the claimant, but instead goes into government coffers. What’s more, the penalty may be applied regardless of whether a financial award of compensation is made against the employer.
A government that has steadily eroded employment rights hasn’t changed its spots. This seems simply to be a tax on tribunals and, at best, a gentle (discounted) slap on the wrist for bosses who mistreat their staff.
To read Thompsons’ response to the Enterprise and Regulatory Reform Bill, click here
Posted in: Blog Posts |