New powers of Employment Tribunals
Employment Tribunals will be able to impose additional financial penalties on employers who lose at Employment Tribunal. The penalty will be payable to the Exchequer, not the claimant. The penalty will be half the award made by the Tribunal (between a minimum of £100 and a maximum £5000) and a 50% reduction will be granted for employers paying within 21 days. The Employment Tribunal has discretion as to whether to impose the penalty and is expected to do so in cases where there are ‘aggravating factors’. The government guidance suggests that ‘aggravating features’ are likely to be an action that was deliberate or committed with malice, or where the employer had a dedicated human resources team (so presumably should have known better) or had repeatedly breached the employment right concerned.
It’s going to be interesting to see in what circumstances the Employment Tribunals choose to impose the penalty. We suspect that there may be some confusion with different Tribunals imposing the penalty differently until the new system settles down.