Employers who disregard the findings of an employment tribunal by failing to pay the compensation awarded will now be held on a public debt register.
Since April 1st, employers who do not pay awards will now be placed on the Register of Judgments, Orders and Fines, which traditionally records the details of those individuals who have County Court Judgments (CCJs) made against them.
It means employees will now have a better chance of recovering their award, says Jonathan Chadwick. He oversees the recovery of hundreds of debts each month and believes the new system will encourage many employers to pay the award rather than face enforcement action and adverse credit scores.
He said: “A report by the Citizens Advice recently suggested that in one-in-ten cases brought before the employment tribunal, employers fail to pay the compensation awarded to employees. They alone deal with about 1,000 cases of unpaid employment tribunal awards annually, providing a real snapshot of the situation.
“Until now, where an employer failed to pay, it was left to the employee to try and enforce their award by starting a legal action in the civil courts. This move by the Ministry of Justice to plug the hole will force employers to pay up or risk their reputation by being placed on the register, which can be searched by members of the public and credit reference agencies.”
There are two other changes to enforcement rules which employers must take into account. From April 1st, an ACAS approved settlement to avoid proceedings or bring proceedings to an end will generally be enforceable as if it were a CCJ. Secondly, the previous requirement for enforcement that an employment tribunal award has to be registered in the Country Court if the person it was made against failed to pay up has now been removed.
Jonathan added: “A debt recovery solicitor can speed up reclaiming the debt because the tribunal order can now be enforced in the same way as a CCJ and the tribunal order will now be registered automatically, previously you had to apply to the court and the process is now much faster.”