A new scheme for penalising employers who fail to pay tribunal awards or settlement sums came into force on 6 April 2016.
Section 150 of the Small Business, Enterprise and Employment Act 2015 inserted the penalties into part 2A (sections 37A to 37Q) of the Employment Tribunals Act 1996. The Department of Business, Innovation and Skills has produced a form to be used when an applicant has not received an employment tribunal award or ACAS conciliated settlement under a COT3.
For tribunal awards, if payment has not been made within 42 days after the tribunal judgment was made, an application can be made using the form. For COT3’s, a complaint can be submitted if payment has not been received by the date agreed as part of that settlement.
Once the form has been submitted a member of the ET Penalties Team will contact the employer regarding the outstanding payment of the award. A warning notice will be issued to the employer informing them that they may have to pay a financial penalty to the government if the award is not paid within 28 days. If the employer does not pay the award, they may be issued with a penalty notice. The penalty will equal half of the outstanding award at the time the notice is issued, subject to a minimum of £100 and a maximum of £5,000.
So in reality this is only a written demand and is similar to a solicitor’s letter demanding payment. There is no much incentive in making the application since none of the penalty goes to the applicant is all goes to the Government.