Government to tackle non-payment of tribunal awards

New research commissioned by the government has found that over half of individuals awarded a pay-out following an employment tribunal hearing do not receive their award in full.

The Payment of Tribunal Awards 2013 study, carried out by IFF Research, examined whether awards were paid, reasons for non-payment and the effect of enforcement action.

According to the research, one of the most common reasons given for non-payment was that employers simply refused to pay. As a result, the government has announced that it is considering giving new powers to judges to enable them to demand deposits from employers unwilling to pay up-front.

Other findings of the research include:

• 49% of claimants who had been granted an award by an employment tribunal had been paid this award in full, and a further 16% had been paid in part. This amounts to 64% of all claimants, and leaves more than a third who had not received any money at all, even after in some cases enforcement action was taken;
• of those who were not paid their award without resorting to enforcement, almost half (46%) pursued enforcement through the courts; this equates to 22% of all claimants;
• claimants with larger award values (over £5,000) who were not paid their award were more likely to report that the company had become insolvent or ceased trading (46% compared with 35% of those with awards under £5,000);
• the reason most commonly given for non-payment was that the company no longer existed / had become insolvent or otherwise ceased trading (37%). One in three claimants whose award was not paid (29%) stated that the employer had refused to pay, and 17% were unable to locate the employer.

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