Government study shows powers to tackle non-payment of tribunal awards are insufficient

The Government has recently commissioned a study to find out from successful claimants whether tribunal awards were paid and, if not, the reasons for non-payment and the effect of enforcement action. To gather the information the independent research company interviewed 1000 successful claimants between May and June 2013.

Worryingly for claimants, the study found that:

  •  49% of claimants had been paid their award in full
  • 16% had been paid part of their award
  • 35% received nothing at all

The reason most commonly given for non-payment was that the employer no longer existed / had become insolvent, although many claimants believed that the company was trading under a different name. Other reasons were that the employer refused to pay (29%) and that the claimant could not locate the employer (17%).

At the moment, if an employer fails to pay out, the claimant can either seek to enforce the award through the County Court or via the Fast Track scheme. Almost half of those who had not received their award pursued enforcement through the Courts. This equates to 22% of all claimants. Of those claimants who had pursued enforcement action only around half were successful in receiving either some or all of their award.

The main reason given by claimants who failed to take any enforcement action was lack of awareness of the enforcement options available to them. Only 41% of claimants were aware of the options open to them if their employer did not pay.

The Government is now looking at how they can improve the options available to ensure that successful claimants receive their awards. Jo Swinson, the Employment Relations Minister, has said that they ‘will look closely at how we can tighten things up to make sure that people get what they are owed’. The Government are considering introducing additional enforcement measures such as fixed penalty notices for late payment, naming and shaming employers who fail to pay and giving tribunal judges the power to demand deposits from employers where the judge thinks they may not pay out.

At the moment the Redundancy Payments Service can pay elements on a tribunal award if an employer is insolvent and the Government is also looking at raising claimants’ awareness of the service.

This entry was posted in Devonshires, employment, employment law, UK employment and tagged . Bookmark the permalink.

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