Judges could demand employer deposits in employment tribunals
Employment tribunal judges could be given new powers to demand deposits from employers, after research showed more than half of successful claimants do not receive their money.
Only 49% received their award in full, while 16% received part of their payment and the rest got nothing, according to a study by IFF Research for the department for business, information and skills (BIS), Payment of employment tribunal awards 2013.
Longer serving employees were more likely to receive their award—29% of those with less than a year’s service received full or partial payment, compared to 72% of those who had worked for longer than five years. The average award was £2,600.
Relatively few—one in five—claimants who were not paid in full took enforcement action. The main reason given was that they did not know how to do this. In more than a third of cases, the employer had not paid because they were insolvent—but half of employees in this situation said the company was now trading under a different name.
Enforcement action works in about 50% of cases.
The study, based on interviews with 1,200 claimants in the UK and published in November, acknowledges that the rise in tribunal fees for employment cases “is perhaps a particular concern in light of the forthcoming changes to the employment tribunal process where individuals will need to pay an ‘issue fee’ to file a case with the employment tribunal and a further ‘hearing fee’ if the claim proceeds to a hearing”.
Sarah Naylor, employment solicitor with Atherton Godfrey, says: “Claimants are often very disheartened to find that after going through what is usually a lengthy and stressful tribunal claim, they then have to face a further set of proceedings in the county court or fast track enforcement system to try and recover what they are due.”
Employment relations minister Jo Swinson says the government is considering giving judges powers to demand deposits from employers, introducing fixed penalty notices for late payment and naming and shaming employers who fail to pay out.
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