Are Employment Tribunal Judgments Hard to Enforce?

In a recent Employment Tribunal case, the Claimant, Nadine Fallone (NF) was awarded nearly £65,000 for unfair dismissal and detrimental treatment against the Defendant, Peckham Levels Ltd. However, more than a year later, NF is yet to receive a single payment.

Compensation

In total, NF was awarded by the tribunal:

• £28,750 for detrimental treatment,
• £35,250 for unfair dismissal,
• £915 in compensation.

However, shortly after the judgment was handed down, Peckham Levels Ltd became insolvent and went into administration.

Context

A joint investigation by the BBC and the Bureau of Investigative Journalism revealed that out of 7,000 people who used the government’s Employment Tribunal Penalty Enforcement and Naming Scheme, over 70% have not received their award.

Despite over 4,800 penalties being issued (worth more than £9 million), only 109 have been recorded as paid. The scheme also sought to publicly name those who have not paid. However, not a single employer has so far been named by the government for non-payment, despite nearly 4,000 requests being made.

Why Are Tribunal Awards So Hard to Enforce?

There are several reasons it is difficult to enforce ET judgments:

1. Company Insolvency

If a company goes into administration or is dissolved, it often has no assets left to pay awards. Directors of limited companies are not personally liable for company debts, leaving claimants with no legal route to recover funds.

2. Lack of Government Enforcement

The government scheme introduced in 2016 was meant to penalise non-paying employers and name them publicly. However, enforcement has been slow, and the process of publicly naming the companies is currently not taking place.

3. High Court Enforcement

Claimants can escalate enforcement to the High Court, using bailiffs to recover debts. However, this process is costly, complex, and often ineffective if the employer claims to have no assets.

4. Legal Loopholes/Shell Companies

Some employers operate through multiple entities or dissolve companies strategically to avoid liability. In separate case, a Claimant’s employer used a separate firm with no assets, making enforcement nearly impossible.

If you are an employer or employee affected by the above issue and want advice or support in connection with the same, or any employment law or HR issues more generally, please do not hesitate to contact us on 01206 239 761.