A government minister has said it is ‘scandalous’ that so few employment tribunal awards are paid promptly by employers.
Business minister Baroness Neville-Rolfe said new measures to punish those who pay late will be an effective way of forcing rogue employers to comply.
The Small Business, Enterprise and Employment Bill includes provisions for employers who have not paid the award to receive a warning notice from an enforcement officer. If they do not pay in full after that, they will be hit with a penalty of 50% of the award, with further penalties for repeated non-payment.
Speaking during the committee stage of the bill in the House of Lords on Monday, Neville-Rolfe said the legislation would help employees get full payment of tribunal awards.
‘Without enforcement, only 40% of awards are paid within six months. That is clearly scandalous,’ she said. ‘Our financial penalty clause is intended to incentivise prompt payment of employment tribunal awards and to prevent employers ignoring judgments by employment tribunals.’
She rejected a Labour amendment to have the penalty amount paid directly to the employee waiting for their award.
But Neville-Rolfe agreed that the penalty regime must not inadvertently reduce the likelihood of individuals gaining their full award.
She added: ‘The point of the penalty is to act as a deterrent and a sanction for non-payment. Conflating money owed to the claimant with a civil penalty would cause confusion and might raise questions about which liability had been met when money was paid.’
Conservative peer Neville-Rolfe also reiterated the government’s intention to review the introduction of tribunal fees and said the scope and timing of the review are currently being considered.
She said she shared ‘to some extent’ concerns that workers were being denied justice, with the number of tribunal claims having dropped by around 80% since the introduction of fees in July 2013.
But she added it was ‘reasonable’ to move away from funding being provided largely by the taxpayer towards a more balanced process, whereby the £74m cost of administering claims to the employment tribunal system were met in part by those who use the system.