From the TUC

Rogue employers forced to pay up

22 May 2009, by in Working Life

This week has seen a (little reported) campaigning success, as the Ministry of Justice announced new measures to improve the enforcement of employment tribunal awards. Although it sounds technical, this measure has potential to lead to real improvement for workers, who will now have a greater chance of actually recieving compenation they are awarded. The announcement followed the publication of research which found that (among a large sample of respondents who had won employment tribunals and had waited for the 42 day period that employers are permitted to take to pay) 39 per cent had not received the award they were entitled to, and only 53 per cent had been paid in full. This is an injustice that Citizens Advice have been highlighting for years, and that the Commission on Vulnerable Employment (CoVE) also identified. The fact that the MoJ have recognised the scale of the problem, and taken steps to enable claimants to recieve their awards, is a real success.

The essence of the issue is that although taking a case to an employment tribunal is a difficult and complex process tribunals have no power to enforce their awards, meaning that even when claimants are successful there is no guarantee they will receive payment. CoVE met with workers who had been through lengthy, expensive tribunal processes, only to find that their successful claims led to nothing because employers refused to pay (you can hear about one worker’s experience here). The only option a worker has in this situation is to take their employer to the County Court, incurring further upfront fees (which the employers will be liable to pay should they honour the award, but which workers have initial responsibility for paying) for various enforcement actions.

The MoJ’s research, itself the result of lobbying, found that non-payment is endemic. And for those who are aren’t paid, the county court is not a popular option – of those who had not received payment, only a third (36%) had initiated county court proceedings. Among those who had not received payment but chosen not to involve the county courts, one in five considered the process ‘to be too much hassle’ and a further 8% felt that it was ‘too time consuming’. Lack of awareness about county court options was also an influence (18% did not know they could commence proceedings).

So what will the MoJ’s new proposals do to improve the situation? As well as providing more routine information on how to enforce awards, the MoJ are proposing to engage High Court Enforcement Officers to take on recovery of awards granted by employment tribunals or in out-of-court settlements. Of course this won’t mean that all awards are paid. And it isn’t yet clear whether this will be a free service or if some up-front payment will be required from claimants. But the recognition of the problem, the deterrent effect of a stronger enforcement regime and at least the start of a solution, have been warmly welcomed.

One Response to Rogue employers forced to pay up

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