Amendment 20M would remove the requirement that a financial penalty be set at 50% of the amount of any compensation awarded. We support the provision to levy an additional fine on employers where they have been found to have breached an employee’s rights and there are so-called aggravating features. We hope that this will act as a further deterrent to rogue employers. However, when considered in the context of the main thrust of the Government’s changes to the employment rights landscape, such as the increase in the unfair dismissal threshold to two years and the extension of new settlement agreements, all of which will make it easier for employers to get rid of workers without following proper process, I am not optimistic about the difference this will make. We have some questions over the practical detail of this provision—for instance, what will be considered an aggravating feature, and the impact that it might have on speed of payment of compensation? However, we will discuss those issues in later amendments.
This is a simple probing amendment to understand further the Government’s thinking behind setting the level of fine at 50% of any compensation awarded. We are not strictly opposed to this being the level set but it seems overly prescriptive in that, earlier in the clause, the Government have already set out the parameters for the amount that an employer may be fined under this proposed new section.
We understand that it is important that employers have certainty about the level of fine that they might face if a claim is upheld. However, we would have thought that setting the minimum and maximum levels of penalty at £100 and £5,000 was a more than sufficient guide to employers about what they might face. What is more, if the Government are still anxious about clarity we would have thought that their first priority would be to produce guidance on what will be considered an aggravating feature. I beg to move.