Over a third of tribunal awards still going unpaid

Morrish SolicitorsEmployment, Site NewsLeave a Comment

BIS has published the Payment of tribunal awards: 2013 study, following research between May and June 2013 into whether awards were paid, reasons for non-payment and the effect of enforcement action. The majority of successful claims were for unpaid wages and breach of contract brought against small private sector employers (under 50 staff). The average award was £2,600.

49% of claimants were paid in full, 16% were paid in part but 35% received no compensation (the figures do not add up to 100% due to rounding and some claimants not knowing if they had been paid in full or part). Just over half the claimants who received full or part payment had not needed to take enforcement action. The most common reason for non-payment was the employer having become insolvent (37%). However, over half of claimants giving this reason believed that the employer had continued trading under a different name or at a different location. The authors suggest that the use of “phoenix companies” should be explored further given the potential damage to employment tribunals’ reputation in the eyes of claimants. They also note the increased importance of recovery given the introduction of issue and hearing fees in the tribunals since the study was undertaken.

Referring to the study, Employment Relations Minister, Jo Swinson, suggested that the government will consider changing the employment tribunal rules to give judges the power to order deposits from businesses who they think might not pay up, issuing fixed penalty notices for late payment as well as naming and shaming employers who fail to pay.

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