In 2018, to combat unpaid tribunal awards, the Government announced that it would create a name and shame list which would name every employer who fails to pay Tribunal awards. This came about after the Taylor Review of Modern Working Practices recommended it in 2017. The review was published to encourage the UK economy to be fair but in a more realistic fashion.
Hence, the Department for Business, Energy and Industrial Strategy (BEIS) introduced a scheme to report employers who have not paid the awards within 14 days. The purpose of the scheme was to increase the success rates for timely payments and create another way that forces employers to pay what they owe the claimants.
Under this scheme, once the list of employers has been created, they will be informed of what they need to pay with 14 days to pay it. Subsequently, the employers are sent warnings if they fail and are given 28 more days to pay the award, or further action can be taken. This scheme was to be applied to every case on or after 18th December 2018.
This name and shame list was set to be similar to the current name and shame list the government has published for employers who failed to pay minimum wage. Published in 2021, according to that list, there are about 191 companies that need to pay over 2 million to more than 34,000 workers.
The Process for Unpaid Tribunal Awards
According to BEIS, the naming round would take place every quarter and would reveal a list of employers with the award they need to pay. Given that cases are available on the GOV.UK site, the claimant’s consent is taken before publishing the name of their employer, as it can also make the claimant more identifiable.
As mentioned above, once the list is published, the employers have 14 days to pay the award. Should they fail to do so once, they are given a warning and 28 more days. If their failure persists, then they will have to pay a penalty i.e., 50% of the original award amount plus 8% interest.
This BEIS scheme was set to run alongside the already existing Employment Tribunal Penalty scheme which was established in 2016. That scheme was created so individuals can ensure their awards (with interest if needed) are paid to them, should they remain unpaid for a certain amount of time.
What Went Wrong?
A recent Freedom of Information request has revealed that despite being notified over 3000 times, BEIS has failed to add names to their name and shame list. This request also states that about half of employers failed to pay the award despite their 28-day warning.
Julie Bishop, director of the Law Centres Network, tells The Guardian that this scheme won’t work. She further adds this is yet another hurdle that employees need to face, even if they beat the odds and win at a Tribunal. Bishop thinks this scheme is a gimmick which has done nothing to increase the accountability of the employers.
A big reason behind the failure of this scheme could be that enforcing agencies do not have access to the money itself. They cannot force their way into the property where the employer is and physically collect the money. All the scheme aimed to do is send warnings, and without any names on a public list, employers are not being held accountable to the point where they can lose employees or their business.
Despite what the FOI request says, a BEIS spokesperson told The Guardian that, so far, they recovered over 6 million that was owed to individuals.