Going all the way to a successful employment tribunal outcome can be an arduous journey, made worse if the employer at fault doesn’t comply with the outcome.The Firm spoke to Gina Wilson of MacRoberts and found that winning the case sometimes isn’t enough.

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It may have slipped your notice -in fact it is virtually guaranteed that it passed unobserved, given the paucity of the coverage- but a report and investigation by the Citizens Advice Bureau in October found that 10 per cent of employers on the losing side of an employment tribunal claim simply failed to make payment of the award due to the claimant. The result is that some 1500 employees per year receive nothing, despite having fought and won a claim through the tribunal system.

The injustice in this statistic is obvious and alarming, yet anecdotally this does not appear to be a commonly observed problem amongst practitioners in this area. Gina Wilson, employment specialist and associate at MacRoberts explained that this this hidden tide of default was something neither she nor her colleagues had yet encountered in practice.

“I have never had a client who hasn’t paid a tribunal award. A different matter is where a case is settled in advance of the tribunal, and there has been an ACAS settlement agreement. I have had one client who failed to pay in full because they became insolvent, and two of my colleagues have had that also. But not actually losing in a tribunal and failing to pay out an award against them,” she says.

Nevertheless, there is clearly a problem somewhere in the system when the ruling of a constituted court -albeit a quasi-judicial one such as an employment tribunal- can nevertheless be ignored with impunity. A harsh outcome when the process of raising and completing a tribunal claim, which in itself can take six or eight months to complete and may be traumatic for a claimant if the solicitor acting for the respondent gives a robust cross examination, results in the ultimate award not being paid out. And most employment claims can only be brought in the employment tribunal, so there is little option to choose your forum. Something in the process must be facilitating safe default.

“I would expect that the majority of these employers who default are defaulting because the company is insolvent,” Wilson speculates.

“For the others, they just don’t want to pay out, and know that it is going to be a hassle for the claimant to go the civil court to enforce the award, and they just take a risk on it. Wing it and see what happens. I would imagine that, if it goes to court and it looks as if the court is going to grant decree against them, they would pay out at that point.”

The Citizens Advice Bureau are not content to sit still on what they see as a clear injustice, and have lobbied for the “loophole” as they call it to be closed by ensuring the state pursues defaulting employers. However, Wilson cautions that this step may have further consequences.

“I think it certainly could close that loophole. The question is, what cost is going to be attached to that, if the state are responsible for enforcing these awards, and taking the hit in the event that they can’t recover the sum for the respondent? The report seems to be saying they don’t think it would cost that much, and with respondents knowing that the state is going to be enforcing that award against them, people would just pay out, because they know that the state’s resources are unlimited and they will do what it takes to get money; a disincentive to respondents to refuse to pay out.”

“I think it is a good move, whether it be the respondent who is not paying out, or the claimant who has an award of expenses against them because the respondent has been successful in a counterclaim. It cuts both ways; the claimant could refuse to pay out. Whoever is refusing - if they were told the state as going to be responsible for enforcing the award against them- would think twice about failing to comply.”   

Unlike for instance inheritance tax law or provisions in relation to same sex relations, Wilson also observes that employment law issues, whilst oft unreported, are nevertheless evolving rapidly, so much so that they are frequently ahead of the curve of social practice.

“The government is very proactive in the employment legislation it introduces,” she says.

“All of the family friendly legislation we have has come before the culture change. When you think about the fact that we have paternity leave, now nine months paid maternity leave, and we are moving to the situation where maternity leave will probably be bale to be shared between the mother and the father –which I reckon will be brought in before there is a groundswell. The legislation is ahead of what the general public views are.”

“Whilst the non-payment of tribunal awards is not a problem that has a high profile, it is clearly an issue that is not only on the Government’s radar but which it is addressing. In May this year, the House of Lords debated a proposed amendment to the Employment Bill which provided for the state-led enforcement of employment tribunal awards. Once it was established that the Government was dealing with this problem, this proposed amendment was withdrawn.”

Wilson observes that at UK wide level, the Government has sought to address this problem via the Tribunals, Courts and Enforcement Act 2007, which makes provision for the enforcement of all tribunal awards, directly by Bailiffs or Sheriff Officers, as if they are payable under a court order.

“The Act also provides that a settlement agreement brokered by ACAS will be enforceable in the same way and for unpaid awards to be included on the Register of Judgments and Orders which can adversely affect a respondent’s credit rating. It appears to me to be sensible and acceptable that the Government wishes to assess the impact of these new measures, particularly in light of the well-established principle that the conduct of civil proceedings should generally rest with the parties concerned. In addition, it was noted that the Government was commissioning its own enquiry and intended consulting the CAB.”

Proof, if it were needed, that the voice of the Citizens Advice Bureau echoes far down the corridors of power.

“In October, two days after the publication of the CAB Report, the House of Commons Public Bill Committee debated another proposed amendment to the Employment Bill which would put a duty on the Government to produce secondary legislation providing for state enforcement of employment tribunal awards. Again, after some debate, the proposed amendment was withdrawn as it was acknowledged that the Government was dealing with the problem of enforcing unpaid employment tribunal awards. In addition to the proposed introduction of the provisions in the 2007 Act, the Government has committed to reporting the findings of its research about the extent of non-payment by 26 November this year,” Wilson adds.