Fines and Orders Against an Employer
A Tribunal has various powers to award compensation and other remedies to an employee when a statutory entitlement has been breached by an employer. Employment Tribunals also have other powers that the judge/panel can exercise but those orders do not generally lead to payments to an employee. Those may take the form of a fine against an employer which is payable to the Goverment or an award that is only made to, for example, a trade union. These type of awards are noted below.
Aggravated Conduct by an Employer ~
If an employer loses a Tribunal case in which there are “aggravating features” e.g. deliberate, malicious or negligent behaviour or a long breach or repeated breaches, the Tribunal may fine the employer between £100 and £20,000. The fine is irrespective of the nature of the remedy that was awarded to the claimant. (The penalty may be reduced by 50% if is paid within a specified period).
Large employers are more likely to face such fines. An Employment Tribunal may raise a fine:
- Normally at 50% of the value of any compensation awarded but the minimum and maximum amounts of a fine are £100 and £20,000 respectively;
- A fine may be raised even if no compensatory award is made to an employee;
- The fine is paid to the government not the individual.
- It is for the Tribunal to determine whether a fine should be levied and Tribunals have been advised to take into account factors such as the size of the employer, whether the organisation has an HR department and/or if repeated breaches have occurred.
Protective Award ~/
This is a sanction against an employer for the breach of consultation requirements in the situations mentioned below. A trade union may make a complaint about an employer’s actions which can lead to an award in favour of the Trade Union. This usually concerns a failure by an employer to consult an employee in a redundancy situation or in a transfer of an undertaking.
The amount of the awards differ as does the question of who is entitled to make such a claim as noted later.
- failure to consult in a transfer of an undertaking (TUPE) – up to 13 weeks gross pay;
- failure to consult in a redundancy situation – up to 90 days pay.
- An award is in respect of each of the named employees in the order.
Time limit for a claim is 3 months from the last day about which the complaint is made.
There is no cap on a week’s pay if a Tribunal determines that a protective award should be ordered. The employer can not offset any payments which are made to an employee in line with his/her contract during the period of the Protected Award.
Who Can Claim a Protective Award?
This could be a trade union representing affected employees or if a trade union is not involved any employee representatives. elected specifically for that purpose. Only employees within the specific bargaining unit can receive such an award and similarly if an employee claims an award successfully it only applies to that employee; it does not cover other employees in the same or similar circumstances.
TIP – this is not a straight forward part of the law so legal advice should be sought.
Failure to Consult with a Recognised Trade Union ~ /
If an employer fails to consult a recognised trade union on the training of its members within the recognised bargaining unit, the trade union may make a complaint to an Employment Tribunal. If successful, the Tribunal may award compensation to each affected member within the the range of £0 – £1,142 (£1,088).
The award is based on the statutory limit for a weeks’ pay.
Underpayment of National Minimum Wage ~
Paying below the National Minimun Wage can be an expensive mistake for an employer:
– A 200% fine is payable of the amount underpaid – unless that is paid within 14 days;
– The minimum fine is £100 and the maximum £20,000.
The maximum may be imposed upon an employer for each worker who is underpaid.
Moreover, the employer may also be harmed in other ways:
- A director of a company which fails to pay the National Minimum Wage may be banned for up to 15 years;
- The organisation/trader may be named and shamed publicly in some instances.
Unpaid Award Made by An Employment Tribunal ~
A failure to pay or a delay in paying an award made by an Employment Tribunal to an individual may result in a fine. That can also include an unreasonable delay in payment e.g. the Respondent is waiting to decide whether to appeal against the original decision of the Tribunal:
The employer will be warned in writing that if an award it is not paid within a set period (the maximum period is 28 days) a fine may be imposed. (Note that would be in addition to any interest due on the late payment – the interest would be payable to the employee.)
A fine will be normally at 50% of the value of any compensation awarded but the minimum and maximum limits of a fine are £100 and £5,000 respectively;
The fine is paid to the Government – not the individual.