With effect from 6 April 2014, Employment Tribunals will have the right to make financial awards against employers who lose cases in the Employment Tribunal. This will only apply to cases where the application was filed on or after 6 April 2014. If an Employment Tribunal does order the employer to pay a financial penalty, that money goes to the Government, not the employee.
There are limited circumstances in which Employment Tribunals can impose these financial penalties. These are where the employer’s behaviour which leads to the successful claim against it had “one or more aggravating features”. It will remain to be seen how this is interpreted in practice, but we imagine that for example an employer which deliberately ignores a disciplinary process and simply dismisses someone may well be ordered to pay a financial penalty.
The amount of the financial penalty will be for a minimum sum of £100 and a maximum of £5,000. The Employment Tribunal will be entitled to impose a financial penalty even where it makes no award of compensation to the employee, but where it does make an award to the employee the amount of the financial penalty will normally be 50% of the employee’s award. The Employment Tribunal must also take into account the employer’s ability to pay. However, if the employer pays within 21 days, they are entitled to a discount of 50% of the financial penalty imposed – a bit like a parking ticket!
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).