Wage and Redundancy Claims to Employment Tribunal
There can be few organisations that have not inadvertently failed to pay an employee the right amount at some time, particularly when they are leaving the organisation through resignation or dismissal. Normally these things are sorted out through informal routes, the matter corrected and the problem resolved to everyone’s satisfaction.
If the informal route did not bring about resolution, then the statutory 3-step process ensured that the employee had to formally lodge a grievance before they could initiate an employment tribunal claim but with the 3-step process removed, it may be that the first you know of the problem is when the ET1 arrives on your desk.
Until April 6th, workers can only hope to get through the Employment Tribunal system that which they are owed but the Employment Act 2008 changes all of that. The Act allows the Tribunal to award:
“such amount as the Tribunal considers appropriate in all the circumstances to compensate the worker for any financial loss sustained by him that is attributable to the matter complained of”.
In other words, not just the sum owed but also compensation for loss or losses incurred as a result of them not receiving the right money at the right time. The most obvious claims arise from bank changes or the cost of overdrafts. But consider a situation whereby someone’s home is repossessed because of mortgage arrears due to an organisation’s failure to pay full notice money or proper redundancy payments; or perhaps someone’s credit rating takes a tumble because they were unable to pay instalments on credit for goods such as furniture.
Our examples may be stretching the point but until cases start appearing before Tribunals there is no way of knowing how this paragraph of the Employment Act will be interpreted and how any such awards will be calculated. “Wages” claims may also cover wrongful dismissal – that is, the person dismissed was not given proper contractual notice payments, which in many caes may be up to 3 months salary. So, was a gross misconduct dismissal really gross misconduct or was it simply misconduct and therefore the individual should have been given proper notice?
Whilst we all await the first cases in order to gauge the approach of Tribunal Chairmen, some of us take heart from the fact that those unscrupulous organisations that dismiss for dubious conduct reasons rather than make proper redundancy payments may now be deterred from doing so. Acas tell us that simple ‘wages’ claims are the least likely to settle on a COT3 or compromise agreement. The impetus to see through an ET claim, with the prospect of achieving damages payments in addition to that owed, will now be even greater.
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