14 October 2008
The deliberate non-payment of Employment Tribunal awards by rogue employers
Every year, about 15,000 Employment Tribunal claims conclude with a judgement in favour of the claimant, and a monetary award of hundreds, thousands or even tens of thousands of pounds. The preparation of the claim and its presentation at the tribunal hearing will often have involved many months of stressful effort. But for as many as one in ten of these workers, their apparent success in the tribunal soon proves to be a hollow victory, when the employers simply fails to pay up. For these claimants, the Employment Tribunal system has delivered empty justice.
Employment Tribunals have no powers to enforce their awards, which must be enforced through bewilderingly complex and costly legal action in the civil courts. However, rogue employers can easily drag out and frustrate such enforcement action so that, for an individual claimant, it becomes inordinately time-consuming and expensive.
As a result, many claimants never even try to enforce their unpaid award in the civil courts, whilst others try but soon give up in frustration. Rogue employers appears to be only too aware of this, and seemingly calculate that non-compliance with the tribunal system, including non-payment of any award made against them, is a gamble that pays.
This briefing argues that closing this loophole is the Employment Tribunal system is essential if the Government is to deliver on its promise to 'protect vulnerable workers' and 'support good employers'. It concludes that unpaid awards should be enforced by the State, rather than by claimants, and suggests how this should be done at minimal cost to the taxpayer. In the words of the Employment Relations Minister, 'there should be no hiding place for [rogue] employers who are not prepared to obey the law'.