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Tribunal award payments

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Failure to pay tribunal awards could amount to post termination victimisation

Victimisation is a form of discrimination whereby one person treats another less favourably because the first person knows or suspects that the second has done or intends to do one of the following “protected acts” bring discrimination proceedings; give evidence or information in connection with discrimination proceedings; allege unlawful discrimination; or do anything else under, or by reference to, the discrimination legislation.

In a case reported last month, Rank Nemo (DS) Ltd and others v Coutinho [2009] EWCA Civ 454, the Court of Appeal concluded that failure to pay unfair dismissal and race discrimination awards to an ex-employee could potentially amount to post-termination victimisation.

It has already been established in the earlier cases of Rhys-Harper v Relaxation Group plc and D’Souza v London Borough of Lambeth [2003] ICR 867 that provided that the events in question were closely connected to the former employment. Events which occur post-employment could amount to unlawful discrimination.

In this particular case Mr Coutinho, an IT specialist of Asian origin, was made redundant from a company, which was later sold to Rank in circumstances in which the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) applied. In applying the conclusions of Rhys-Harper and D’Souza, Mr Coutinho brought successful actions against his previous employer and Rank for unfair dismissal and race discrimination and was subsequently awarded over £72,000. Under TUPE, liability for these payments passed to Rank.

Despite Mr Coutinho obtaining a court order against Rank, Rank neglected to pay the award. Consequently, in April 2008, Mr Coutinho pursued a claim at the Employment Tribunal against Rank for victimisation under of the Race Relations Act 1976. Essentially he argued that the reason that rank had failed to pay him his award was because he had done one of the “protected acts” mentioned above.

As a general rule, the party to whom the compensation is owed, must register the award at the county court and pursue the enforcement procedures available there. Therefore, whilst the Tribunal thought it did not have a jurisdiction to hear an issue of enforcement and rejected Mr Coutinho’s claim, the Employment Appeals Tribunal concluded that “this case cries out for determination on the facts rather than for it to be stopped even before a strike out is reached.” As such, the Employment Appeals Tribunal decided that the Tribunal had jurisdiction to consider the possibility of post-termination victimisation by establishing the link between the reason for non-payment and the previous employment relationship that existed. In this case, Mr Coutinho was a judgment creditor and therefore had a continued link with his previous employment.

Rank unsuccessfully appealed the EAT’s decision at the Court of Appeal, which also held that Mr Coutinho’s claim was not to enforce an unpaid award, but to investigate the reason for Rank’s failure to comply with the judgment.

This case highlights the opportunity for former employees to claim both the original tribunal award and additional damages for victimisation (subject to any rule prohibiting recovery of double compensation), where an employer fails to honour its judgment debts.

Furthermore, since 1 April 2009, employers who do not pay Tribunal awards can be “named and shamed” on the Register of Judgments, Orders and Fines once enforcement proceedings are commenced.

If you have any comments or questions about this article or any employment matters, please contact Padma Tadi of Watson Burton LLP at padma.tadi@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .