16 January 2015

Enterprise and Regulatory Reform Act 2013 (ERRA) made a series of changes to the employment tribunal procedure including the introduction of Early Conciliation.

Section 16 of (ERRA) made provision for employment tribunals to have a discretionary power to impose a financial penalty on employers who breach an individual’s employment rights subject to a maximum of £5,000.

In its guide to the Act the government claimed that: “In order to encourage employers to meet their obligations in respect of their employees, tribunals will have a new discretionary power to impose a financial penalty on employers who breach an individual’s employment rights. The penalty will have a maximum limit of £5,000 and will be payable to the Exchequer… It is designed to encourage business to have greater regard to what is required of them in law and, ultimately, lead to fewer workplace disputes and employment tribunal claims.”

However, a written question submitted by Ian Murray MP last month asked “how many financial penalties have been imposed on respondent employers under section 16 of the Enterprise and Regulatory Reform Act 2013 to date; and how many such penalties (a) have been paid and (b) remain unpaid”.


Jo Swinson, the Parliamentary Under-Secretary of State for Employment Relations, Consumer and Postal Affairs responded: “Financial Penalties, as described in section 16 of the Enterprise and Regulatory Reform Act 2013, commenced on 6 April 2014. None have been imposed so far”.

Not exactly the deterrent the government had promised.