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Losing employers set to face tribunal penalties

Employers who lose a case at an employment tribunal could find themselves facing extra financial penalties, on top of any compensation they have to pay to a former employee.

From 6 April 2014, employment tribunals now have the power to impose a penalty of between £100 and £5,000 when an employer loses a case and where the tribunal considers the way the employer breached the worker’s rights has one or more “aggravating features”.

The penalties – which will be paid to the government – will only apply when a claim has been made on or after 6 April 2014.

The aggravating features are not clearly set out in the legislation, leaving it open to tribunals to consider the facts of each case.

However, a policy paper on the legislation published in January 2013 said that aggravating features would include “malice or negligence” but not “inadvertent errors”.

It said the penalties were “designed to encourage business to have greater regard to what is required of them in law and, ultimately, lead to fewer workplace disputes and employment tribunal claims”.