This article was published on October 25th, 2013
An announcement has been recently made by Jo Swinson, Employment Relations Minister, that section 16 of the Enterprise and Regulatory Reform Act 2013 (ERRA 2013) will come into force on 6th April 2014.
Section 16 of ERRA 2013 gives tribunals the power, in situations where a case is held to have “aggravating features”, to order an employer who has lost the tribunal to pay a financial penalty of up to £5,000.00 to the Secretary of State.
This announcement has come somewhat out of the blue given that Section 16 of ERRA 2013 was initially listed as one of the regulations that the government had “no current plans to use”.
It remains to be seen what kind of conduct by an employer the tribunals will interpret as being an “aggravating feature” given that this is not defined or explained in the legislation. At the consultation stage, the government suggested that this power should be used where “the breach involves unreasonable behaviour, for example where there has been negligence or malice involved”.
Critics have been quick to question why the financial penalty should be payable to the government and not the Claimant, bearing in mind that it is the Claimant who has been subjected to the employer’s conduct.