Penalties for non-payment of Tribunal awards and settlements

Alan Price – Chief Operations Officer

April 11 2016

On 6th April 2016, a new provision in the Small Business, Enterprise and Employment Act 2015 relating to tribunal awards came into force – this means if you don’t pay a tribunal or ACAS settlement award set against you, you can expect to pay a financial penalty. Here’s the lowdown... This new provision in the Act means that once a ruling has been made by the tribunal and the awards have been identified by the remedy judgment, should they not be complied with, tribunal enforcement officers will issue the liable employer with a warning notice. If after the warning the employer has still not complied with the payment demand, the tribunal enforcement officer will then have the power to impose a financial penalty on the employer. The penalty can be issued in relation to employers who fail to settle their financial liabilities such as:

  • Costs awards
  • Employment tribunal fees
  • Settlements reached through the ACAS Early Conciliation Service

Limits within the provision This new provision in the Small Business, Enterprise and Employment Act also imposes certain limits to this power:

  • The amount of any imposed financial penalty must be 50% of the total amount owed to the Tribunal or Claimant
  • The penalty is subject to a minimum of £100 and a maximum of £5,000.
  • If an employer is issued with a penalty, they will be liable to the amount which they owe, as well as the amount of the penalty.

There’s also a statutory provision which waivers 50% of the fine if the employer pays the amount owed, along with the reduced penalty, within 14 days of the date that the penalty notice was issued. This provision builds on a similar power that tribunals were granted in April 2014, where they can impose a financial penalty against employers who have breached an employee’s employment right where there are aggravating features.  

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