Financial Penalties From April 2014 for Employers Losing Tribunal Claims

Employment tribunals will be able to order employers who lose tribunal claims to pay financial penalties from April 2014. 

The penalties, ranging from £100 to £5,000, can be imposed by tribunals where the employer’s breach has “one or more aggravating factors”. The amount of the penalty halves if payment is made within 21 days, and tribunals must take account of the employer's ability to pay when deciding on the level of the penalty. 

Tribunals will not be able to order penalties in any case that was begun before the penalties come into force.  

It is unclear what will amount to "aggravating features" although the Government has suggested that tribunals will impose penalties where "the breach involves unreasonable behaviour, for example where there has been negligence or malice involved" and not where there has been a genuine mistake. 

The penalty will be paid to the Secretary of State, not the claimant.

The power to order the payment of penalties is contained in the Enterprise and Regulatory Reform Act 2013.