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Employment tribunals and financial penalties – what you need to know

From 6 April 2014, employment tribunals will have the power to impose a financial penalty on an employer, in addition to making a compensatory award in favour of a claimant, where:

  • the employer has lost the tribunal claim;
  • the employer’s breach had ‘one or more aggravating features’; and
  • the tribunal decides to exercise its discretion to impose the penalty.

The penalty must be 50% of the compensatory award, subject to a minimum of £100 and a maximum of £5000, and will be reduced by 50% if paid within 21 days. It is payable to the Secretary of State, not the employee.

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