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Scotland – Half of employment tribunal awards unpaid

22 September 2014

Legal experts have raised concern over the large number of companies that fail to pay employment tribunal awards, leaving thousands of workers out of pocket. Figures show almost half of successful claimants in Scotland never get a penny, with a further 13% receiving just part of what they are owed, reports The Herald Scotland.

The UK Parliament is currently considering a Bill introducing penalties for employers who fail to pay, but the Law Society of Scotland has called for a full review of the system, including looking at ways to boost payment rates.

Currently, if a company does not pay, the onus is on the claimant to pursue payment through a sheriff's officer, which can cost hundreds of pounds and may still result in them getting nothing.

Andrew Alexander, who deals with access to justice for the Law Society of Scotland, explained that Scottish firms are worst when it comes to non-payment, with a bigger percentage of awards unpaid than in England and Wales: "We think it would be worth exploring a variety of measures to help ensure that awards are paid to successful claimants as part of a review."

He said Government research showed that 46% of awards went unpaid in Scotland, compared to 34% not paid in England and Wales, where there is a fast-track system in place in the county courts to help enforce payment.

"It would certainly be worth examining how to increase the percentage of payments which are due to claimants. A full review of the system is essential to ensure access to justice," he added.

Susan McPhee, Head of Policy for Citizens Advice Scotland (CAS), said: "Scottish [Citizens Advice] advisers have seen a number of people who are seeking advice because they haven't received the award an employment tribunal has ruled they're entitled to.”

"Sadly, it's easy for companies to avoid paying workers what they owe by simply transferring their assets to a new 'phoenix' company and winding up the old one. It's clearly an access to justice issue when the onus is on individuals to pursue money which it has been judicially decided is owed them," she added.

Both the Law Society and CAS said it is important that new fees introduced to employment tribunals are also examined because this has already led to an -81% drop in cases.

Ms McPhee said: "The possibility of not receiving any award is made worse by the issue of fees to be paid up front to access a tribunal. Clients are often faced with the stark choice between risking the money they have to pay for a claim, or not being able to access justice."

A spokeswoman for the Department for Business, Innovation and Skills said: "The Government is determined to clamp down on businesses who fail to pay out: "Under the proposals in the Small Business, Enterprise and Employment Bill currently going through Parliament, businesses that fail to pay will face a penalty.”

"This will help ensure employees get what they are entitled to and that there is a level playing field for the majority of honest employers who follow the rules," she concluded.