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Employment tribunal penalties only recouping a small amount of money

18th Jan 2017

New figures have shown that the government is only recouping a small amount of the extra money it expected to generate from rogue bosses brought before employment tribunals.

Business minister Margot James has admitted that just £17,704 has been paid in financial penalties since they were brought about in April 2014.

Tribunals, which can impose a penalty ranging from a minimum of £100 to a maximum of £5,000, have levied 18 fines against employers for aggravated breach of employment law; of these 18 fines, 12 have been paid.

Before the penalties were conceived, an impact assessment prepared by the Department for Business, Innovation & Skills estimated that judges would impose sanctions in 25% of cases. This would leave employers paying £2.8m a year in extra penalties, which would go straight to the Treasury.

The discretionary penalties were intended as a safeguard to ensure high standards were maintained in the workplace. However, a marked decline in claims since tribunal fees were introduced in 2013 may mean fewer examples of bad practice are being exposed.

Green MP Caroline Lucas, whose written question prompted the government’s admission, said bad employers are getting away with poor practices and evading justice.

Lucas stated that “The tribunal fees introduced in 2013 have eradicated exactly the kind of tribunal claim that ministers had in mind when they came up with the idea: a relatively low-value claim (because the claimant is low-paid) against a rogue, exploitative employer.”

The Law Society has called for an urgent review of employment tribunal fees, which the government was scheduled to have completed this by the end of 2015; however, justice minister Sir Oliver Heald recently admitted that it is still not finished.