New employment tribunal fines net just £18,000 of expected £2.8m a year

A crackdown on rogue businesses has been branded a waste of time as it emerged that the financial penalties handed out so far add up to a tiny fraction of ministers' predictions.

New powers to fine businesses at employment tribunals for "aggravating factors" were supposed to net £2.8 million a year, according to a 2011 Government impact assessment.

But fresh figures show that just 18 fines have been issued since they came into force in April 2014 - totalling just £18,000.

Labour peer Lord Beecham said this showed there was "a world of difference" between the Tories' attitude to unscrupulous businesses and benefit claimants.

Green MP Caroline Lucas, who obtained the figures via a parliamentary question, said: "These revelations make it clear that we should take what ministers say about their shiny new policies with a heaped tablespoon of salt.

"In 2011, ministers claimed the Section 16 penalties would generate an income of £2.8 million a year. So, they should by now have netted some £7 million.

"Yet the actual income of £18,000 at most probably doesn't even cover the time seemingly wasted by MPs and peers on scrutiny of the new penalty power in Parliament during 2012 and 2013."

Four of the fines, handed out under Section 16 of the Enterprise and Regulatory Reform Act 2013, have yet to be paid, while two more had to be written off as the companies were liquidated or dissolved, according to the answer from Business Minister Margot James.

Green Party co-leader Ms Lucas said: "The most likely explanation for the imposition of just 18 penalties is that the tribunal fees introduced in 2013 have eradicated exactly the kind of tribunal claim that ministers had in mind when they came up with the idea: a relatively low-value claim, because the claimant is low-paid, against a rogue, exploitative employer.

"It seems that bad employers are getting away with poor practices, and that justice isn't being done.

"It's clear that the Government must immediately publish the review on employment tribunal fees, on which it has been sitting for 15 months - there is simply no excuse for further delay."

Section 16 fines are additional to any monetary award against the employer and awarded at the discretion of employment judges.

Examples of the aggravating factors earmarked by ministers included employers acting with malice or negligence.

A Government spokesman said: "These penalties exist to punish the most unscrupulous employers and deter breaches of employment rights.

"It is up to the independent employment tribunal whether to issue a penalty.

"We continue to assess the impact of fees and will publish our review in due course."

It comes just days after ministers said no criminal prosecutions had been brought against 700 employers "named and shamed" for failing to pay the minimum wage since 2013.

Lord Beecham said: "When you compare the Government's attitude to benefit claimants there seems to be a world of difference between the likes of I, Daniel Blake and the treatment of employers who don't pay either the amounts awarded in tribunal cases, or the minimum wage.

"If the PM is sincere about her concern for social justice, she should revisit Tory policy in all these areas."

Only half of all successful employment tribunal applicants receive their full payments, according to Government analysis published in 2013.

In April the Government introduced new legislation to warn and fine businesses which fail to pay up after employment tribunals.

Ms James, answering a further parliamentary question from Ms Lucas, said this had recovered an additional £100,000 for claimants.

However, 46 of the 60 fines issued so far remain unpaid, Ms James added.

The Department for Business, Energy and Industrial Strategy is currently consulting on wider reforms to the employment tribunal process.

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