By Patrick Stewart
The Government has announced that from April 2016, it intends to activate the financial penalty provisions contained in the Small Business, Enterprise and Employment Act 2015. The impact of this is that if an employer fails to pay an Employment Tribunal award to the claimant within the deadline, a penalty of 50% of the outstanding amount will be imposed. There is a minimum of £100 and maximum of £5000, but this is a significant penalty compared to the award itself.
A warning notice will be issued in the first instance, followed by a penalty notice if the award remains unpaid. Notably, the penalty is payable to the Government not the claimant employee, so the award itself will still be payable to, and enforceable by, the claimant.
This penalty is also in addition to any interest that may be added to a late payment, and is separate to the penalty of 50% where there have been “aggravating factors” in the way the employer acted.
So, if an employer is unfortunate enough to lose at Tribunal, they would be best advised to pay any award made without undue delay.
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