From April tribunals will have the power to order an employer who loses at tribunal to pay a financial penalty of up to £5,000. The payment is in addition to any compensation paid to the employee and can be ordered if the employer’s conduct has ‘aggravating features’ even in circumstances where an award is not made to the claimant.
What amounts to aggravating features has not been explained. I had a case recently where the tribunal came to the conclusion that the employer had made alterations to documents used in a grievance procedure after the documents had been signed and agreed by both parties. You would hope those were aggravating features. Even if they were though the claimant would not have benefitted the penalty is to be paid to the Exchequer.
The amount of the penalty can be from £100 to £5000 and is decided by the tribunal who are required to take into account any factors it considers relevant including the circumstances of the case and the employer’s circumstances. Furthermore an employer who pays quickly (within 21 Days) can reduce their liability by 50%.
This increase in an employer’s potential liabilities following a tribunal decision must be a further factor for employer’s to consider both at the new early conciliation stage or throughout any claim.