Employment law update – financial penalties for employers

New legislation will empower employment tribunals to impose financial penalties on employers where they breach workers’ rights and there are “aggravating features”.

The penalty will be set at one half of the compensation awarded to the employee, up to a maximum of £5,000.  In deciding whether to impose a penalty, the tribunal will have to take into account the employer’s ability to pay.  Where a penalty is imposed there will be a discount of 50% if payment is made within 21 days.

The measures, contained in the Enterprise and Regulatory Reform Act 2013, are likely to be implemented in April 2014.  This will represent another trap for the unwary and underlines the benefit of securing early legal advice in the event of a claim.

If you require employment advice, please contact Nigel Newbery on 01460 279279.