According to BIS 35% of claimants failed to receive their Tribunal Award. The research was conducted between May and June 2013 into whether awards were paid, the effect of non-payment and the reasons for non-payment. The actual figure may be even higher as some claimants who answered were unsure whether they had been paid in full or part.
The most common reason for non-payment (37%) was insolvency of the employer. However, 50% of those claimants believed that their employer had used a phoenix company to carry on the same business under a new legal entity and sometimes but not always from a new location. This is a problem I frequently see in practice. The problem is, for limited companies this is very easy to do although morally it may be a different matter.
Perhaps of note to the more scrupulous employers out there is that the Employment Relations Minister, Jo Swinson suggested that the Government is looking into changing the Tribunal rules to give Judges more power to order deposits from businesses they believe may go insolvent, issuing fixed penalty notices for late payment and naming and shaming employers so do not pay up. Given the issues these measures are aimed at tackling, I am not sure that fixed penalty notices will be any good as they will be too late and if an employer is prepared to do a phoenix from the ashes then I do not think they will care about being named and shamed. As always watch this space.