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Employment tribunal penalties falling short

The government is recouping just a fraction of the extra money it expected to generate from rogue bosses hauled before employment tribunals, new figures have revealed.

Business minister Margot James has admitted that just £17,704 has been paid in financial penalties since they were enabled in April 2014.

Tribunals have levied 18 fines against employers for aggravated breach of employment law, of which 12 have been paid.

Before the penalties were conceived, an impact assessment prepared by the Department for Business, Innovation & Skills estimated that judges would impose sanctions in 25% of cases. This would leave employers paying £2.8m a year in extra penalties – money which would go straight to the Treasury.

The discretionary penalties, imposed for repeated breaches or where the action was malicious, were intended as a safeguard to ensure high standards were maintained in the workplace. The tribunal can impose a penalty ranging from a minimum of £100 to a maximum of £5,000.

However, a marked decline in claims since tribunal fees were introduced in 2013 may mean fewer examples of bad practice are being exposed.

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