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Awards Not Awarded.

Date: 06/11/2013 | Employment & HR

A recent Government study has found that over half of those successful at Employment Tribunal do not actually receive the sum that they have been awarded.  The research shows that 49% of claimants who have been granted a Tribunal award had been paid the award in full.  However 16% of successful claimants received only part of their Tribunal award.  Staggeringly this leaves more than a third of successful claimants who received nothing at all. 

It would appear that the most common reason for non-payment was that the employer had become insolvent or otherwise ceased trading. Another of the main reasons for non-payment was that the claimant was unable to locate their employer. However in many cases non-payment resulted simply because the employer refused to pay.

In relation to those claimants who were not paid their award, only half were successful in recovering either all or some of their award by taking enforcement action. Those who did not use any enforcement option available to them gave lack of awareness as the main reason.

In light of this recent study, the Government has confirmed that it will look at measures to combat non-payment of Tribunal awards.  The Employment Relations Minister, Jo Swinson commented on the study’s findings and noted that the Government would look at the following options:-

  • Issuing fixed penalty notices to employers for late payment.
  • Naming and shaming employers who fail to pay an award.
  • Making changes to the Employment Tribunal rules to give Judges the power to demand deposits from businesses who they regard as being likely to fail to make payment of the award
  • Raising awareness of the availability of enforcement options including increasing awareness of the Redundancy Payment Service which pays elements of the Tribunal award where a company becomes insolvent.

The study itself involved interviewing over 1,000 successful claimants in England, Wales and Scotland between May and June 2013.  Interestingly the most recent findings largely mirror those of a similar study carried out in 2008 in England and Wales.  The study can be found here.

Further Information.
Davidson Chalmers are specialists in employment law, providing clients with a first-rate, cost-effective and personal service. If you would like further details about these changes to UK employment law then please do not hesitate to contact Davidson Chalmers’ Employment Team, who will be happy to provide their advice and assistance.

The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.

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