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Employment tribunals to get powers to penalise employers

Come spring, employment tribunals will be able to penalise employers who get it badly wrong. It will be more important than ever for employers to get good advice and train their staff well.

From April 2014, employment tribunals will have the power to order an employer who has lost a case at tribunal to pay a financial penalty of between £100 and £5,000.

Aggravating features

The penalty comes into effect if the tribunal considers the employer to have made a breach of the rules with 'aggravating features'.

An aggravating feature isn't defined explicitly, but may include actions committed deliberately or with malice. Poor choices made by employers who should have known better because they had their own human resources team, and repeated breaches may also be seen as aggravating.

Before issuing a penalty, tribunals might take into account the size of the employer, the duration of the breach and the behaviour of the employer and employee.

If an employer has been in operation for a short period, is a microbusiness, has 'a limited human resources function', or the breach was a genuine mistake, tribunals may be less likely to apply a penalty.

Costs and consequences

The legislation holds that where the tribunal makes a financial award to a claimant of less than £200, the penalty will be £100. With other awards, the penalty may not exceed 50 per cent of the amount of the award.

Employers get a 50 per cent discount on the penalty if they pay it within 21 days, and the penalty money goes to the Government rather than claimant.

Commentators said that the risk of a financial penalty may encourage employers to seek a settlement rather than risk fighting a claim if their case is weak. It will add to other potential tribunal costs, including awards to claimants, and the reimbursement of tribunal and hearing fees.

Acas publications and services

Early Conciliation, a service also being launched in April 2014 operated by Acas, will give employers and employees an opportunity to settle their differences without the cost and stress of going to an employment tribunal. Prospective claimants will have to contact Acas before they can proceed to a tribunal.

Acas can improve employment relations in your workplace in a number of ways. Its experts can visit your organisation, help you build effective working relationships, and show you how and when to use mediation techniques if problems arise. Go to Disputes and mediation: how Acas can help for further details.

Acas also offers practical training in Dispute resolution and Mediation, and can help sharpen the effectiveness of your managers through its Skills for supervisors course.

Visit the Acas Training Courses, Workshops and Projects area for more information.

This news content or feature has been generated by a third party. Commentary, opinion and content do not necessarily represent the opinion of Acas.

We recommend that you explore further information and advice available on this website, particularly within our Advice A-Z guidance pages. If you have questions about workplace rights and rules visit Helpline Online.

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