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Employers avoid paying out tribunal-awarded compensation

8 April 2005

One in every 20 employees awarded compensation by a tribunal does not receive the payments from their employers, according to a Citizens Advice report published this week.
The research, entitled Hollow Victories, revealed that up to 700 of the 13,000 tribunal compensation awards made annually in England and Wales result in non-payment by the employer. The charity has called for the government to intervene and change the law, which currently gives tribunals no power to enforce payments.
Under the current law, workers have to go to court in an effort to get employers to comply with the award ruling, a process that can be costly and which offers no guarantee of success. Citizens Advice said this is particularly relevant as many claimants are “vulnerable and low paid workers performing unglamorous but essential tasks”. The charity said: “Such a high rate of non-compliance by employers represents a serious threat to the effectiveness and credibility of the Employment Tribunal system as a whole.”
Citizens Advice director of policy, Teresa Perchard, said: “Employment tribunals are off-puttingly legalistic and increasingly adversarial, so taking a case to one can be immensely daunting and stressful. There is no legal aid available, and pursuing a claim involves a lot of time, money and energy”.
“Yet all too often people go through this gruelling process and win their case only to find that being awarded compensation turns out to be a hollow victory. Their employer simply fails to pay up and there are so many legal and financial obstacles to enforcing an award they end up without a penny of the money they should have,” Perchard added. “We urge the government to use the opportunity presented by the forthcoming Courts and Tribunals Bill to ensure that employers can no longer get away with ignoring tribunal rulings, and to ensure that successful claimants are not denied justice.”
Currently, unpaid awards can be registered with the County Court so that financial institutions can check up on companies that are applying for loans. However, this costs a claimant £30 and, if that doesn’t lead to payment, further action increases the costs.

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Company, Consumer, and Contract Procedures Costs Professional negligence