Employers Beware: Financial Penalties for Breaches of Employment Rights With "Aggravating Features"

March 27, 2014

Article by Dechert partner Charles Wynn-Evans and senior associate Georgina Rowley.

At present, when an employment tribunal finds in favour of a claimant, it does not have any power to  penalise the employer for breaching the statutory employment obligations it owes to the individual other than by way of an award of compensation or, in discrimination cases, awards in respect of injury to feelings, exemplary damages and aggravated damages. This will change from April 6, 2014, when employment tribunals will have the ability to impose a financial penalty on employers against whom a successful employment tribunal claim is brought where there is a breach of the individual's statutory rights which has one or more "aggravating features".

The aim of this penalty is to encourage employers to take appropriate steps to ensure that they meet their obligations in respect of their staff and to reduce deliberate and repeated breaches of employment laws.