The Government are considering introducing fines for employers who have been found guilty in an employment tribunal of breaching employees’ rights
The plan is to take the sum awarded to the employee and fine the employer an additional 50%. The minimum penalty would be £1,000, the maximum £5,000
Many businesses are worried about the proposed changes. A survey by law firm, Eversheds shows that 60% of businesses would be more likely to settle out of court than risk being fined an extra 50%.
Other interesting results in the survey include:
- 91% of employers back the idea of a ‘formal offer’ system. This means the employer would make the employee an offer and if the employee refused, the court could reduce the amount of compensation awarded if they thought the employer’s offer was reasonable.
- 83% of employers would be in favour of employees having to pay a fee in order to bring an employment tribunal claim.
- 78% of employers believe there would be a drop in claims if the employees had to work for a company for two years rather than just one before they were entitled to lodge an employment tribunal claim.
Employees need to receive fair compensation
You have to wonder what is at the root of their concern. After all if they do not breach employment rights they would not need to worry about paying out compensation or a fine. The survey shows that the majority of employers would like their employees to be at greater financial risk if they were to go to an employment tribunal.
This is worrying because the employers would have far more financial muscle and could be quite intimidating if they chose to be. In some cases it could be that the employee does not make a claim even if he is entitled to compensation. Justice should never be just for those who can afford the risk.
Owen Warnock of Eversheds said: “Many of the aims and sentiments contained in this consultation paper clearly strike a chord with employers. It is clear that the Government is keen to ensure that more employment cases are settled without a Tribunal hearing.”
It is right that the Government should want fewer tribunal hearings but they have to do it the right way. They have to make it worthwhile for the employer to offer a fair amount of compensation out of court rather than scare the employee out of taking the case to court.