Research published by BIS has shown that over a third of all employment tribunal awards are going unpaid. Figures indicated that most awards were made for unpaid wages and breach of contract, with the average award totalling £2,600.
The research was commissioned by the UK Government and aimed to examine the numbers of unpaid awards, the reasons for non-payment and the effectiveness of enforcement action. It uncovered that just over half of the awards made in May and June 2013 were actually paid, with a further 16% paid in part. The majority of claimants who received no compensation stated that the reason was because their employer had become insolvent, although half of them believed that their employers had continued trading under a “phoenix company”.
In response to the report’s findings Employment Relations Minister, Jo Swinson, announced that the Government is considering whether tribunals need more powers to require deposits from employers whose finances are on a shoogly peg or whether they should be able to issue fixed penalty notices for non-payment. She said:
“Whilst this is primarily about justice for individuals, it is also important that there is a level playing field for the majority of honest employers who follow the rules. Rogue employers should not be allowed to simply get away with not paying.”