Financial penalties imposed on employers that breach employment rights

Implementation date: 6 April 2014

The Enterprise and Regulatory Reform Act 2013 gives tribunals the power to levy a financial penalty against employers that are in breach of employment rights.

Key details

Section 16 of the Enterprise and Regulatory Reform Act 2013 gives tribunals the power to impose a financial penalty against employers that are in breach of employment rights where the breach has one or more aggravating features. If the tribunal makes an award of compensation, the amount of the penalty will be 50% of the award. The penalty is subject to a minimum threshold of £100 and an upper ceiling of £5,000. However, employers will qualify for a reduction of 50% if they pay the penalty within 21 days after the day on which notice of the decision to impose the penalty is sent to the employer.

The Enterprise and Regulatory Reform Act 2013 (Commencement No.5, Transitional Provisions and Savings) Order 2014 brings s.16 of the Act into force on 6 April 2014.