With effect from 6 April 2014, employers that lose an Employment Tribunal will be faced with the prospect of having to make a financial penalty to the Secretary of State. The amount will depend on the findings of the Tribunal and whether the case has highlighted that the employer has breached the claimant’s employment rights – the consequence of which could be a fine of up to £5,000.
This is a further attempt by the Government to reduce the high number of tribunal claims and goes hand in hand with the new legislation regarding Early Conciliation.
With the loss of a Tribunal claim, employers will need to dig deep to not only cover the actual costs of fighting the claim (whether this is internal or external resources including legal representation), any award made by the Tribunal, any reimbursement of fees paid (as ordered by the Tribunal) to the claimant in order for them to pursue the claim and now a financial penalty for poor working practices.
In deciding whether to impose a financial penalty, Tribunals will consider what the new legislation refers to as ‘aggravating features’ and whether one or more of these have been involved in the claim.
The CIPD has reported that the deciding factors relating to a fine being imposed on an employer are likely to include the size of the employer, the length of time of the breach of the employment right and the behaviour of the employer and the employee.
