Enforcing an Employment Tribunal award if the Respondent won’t pay
When a Claimant (the person suing in the Employment Tribunal) is successful in a claim – whether it’s for discrimination, unfair dismissal, or any other issue – at the Employment Tribunal or has entered into a settlement agreement (whether it be a COT3 or compromise agreement) they normally think that is the end of the matter. They’ve fought the hard fight and come out the other side with some form of remedy. However, that’s often not the end of the struggle. The Claimant may have won in the Employment Tribunal or settled the case but they’ve still got to make the Respondent (the person(s) being sued in the Employment Tribunal) pay up (if compensation is a remedy) or comply with the relevant remedy.
As you can probably guess from the above paragraph, a common problem that successful Claimants in the Employment Tribunal have is actually receiving the remedy that they’ve been awarded or agreed. This post will address enforcing an award for compensation (as opposed to other remedies such as re-engagement or reinstatement which will be addressed in future posts). Some companies (usually the smaller companies) just refuse to pay. This can be for a number of reasons – ranging from anger at having lost to insolvency to sheer incompetence. However, whatever the reason for the non-payment the Claimant has one object in mind – being paid what they’re owed under the Judgment or settlement agreement. The rest of this post will deal with enforcing the award of an Employment Tribunal award.
Enforcing an Employment Tribunal award
The Employment Tribunal’s judgment will normally (in less complex cases) contain an award for the Claimant. This award almost always specifies the date that payment of the remedy to the Claimant must be made by. If the Respondent has not paid this sum by the date specified then the Claimant must take steps to enforce the award.
It used to be the case that the judgment creditor would have to apply to the County Court for an order to enforce it. However, this is no longer the case. Since 1 April 2009 successful unpaid Claimants can immediately apply for any one of the following types of enforcement:
- Warrant of execution
- Attachment of earnings order
- Third party debt order
- Charging order
- Application to the ACAS Fast Track
- Appointment of receiver by Court to recover any money owed
The first four types of enforcement are the ones normally used to recover money owed. We shall therefore look at them in more depth below.
Warrant of execution
A warrant of execution authorises bailiffs to seize and sell property owned by the Respondent to enforce the payment of the sum owed. Simply threatening this normally receives the desired result of payment – businesses normally aren’t too happy about their property being seized in broad daylight, both for the adverse publicity it causes and the potential harm to the daily operation of their business.
A request for a warrant of execution must be made to the County Court (if the judgment debt is £5,000 or below) or the High Court (if above £5,000).
Attachment of earnings order
This remedy is only available in the county courts. Where the judgment debtor is an employee (i.e. in a discrimination case) an attachment of earnings order can be used to compel the employer to deduct a proportion of the employee’s earnings from their pay packet until the judgment debt is paid. This is a satisfactory means of enforcement if the judgment debtor is still in employment.
An application for an attachment of earnings order is made through Form N337.
Third party debt order
A third party debt order enables sums owed by a third party to the judgment debtor (i.e. the Respondent) to be frozen and seized by the judgment creditor (i.e. the Claimant). For example, Bob succeeds in a claim for unfair dismissal against Chris. He is awarded £5,000 and knows that Dave owes Chris £10,000. Bob could apply for a third party debt order against Dave.
An application for a third party debt order is made through form N349.
Charging order
A Claimant can impose a charge (similar to a mortgage) over property that the Respondent has a beneficial interest in, such as land or securities. Once the charging order is granted the judgment creditor (the Claimant) can apply for sale of the asset that they have a charge over. However, this method of enforcement is less used as it can be more difficult to navigate.