Interest (Employment Tribunals)
Discrimination cases
Provision for payment of interest on discrimination awards is set down in the Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996 (SI 1996/2803). These give tribunals the power to award interest on the claimant's losses as part of the compensation for discrimination. For more information, see Practice note, Discrimination in employment: compensation and other remedies (EqA 2010): Interest.
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For injury to feelings awards, interest runs from the date of the discriminatory act to the date of calculation.
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For other awards, including past financial losses, the interest runs from the "mid-point" date to the date of calculation (regulation 6(1)(b), Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996). The mid-point is calculated as the date halfway between the discriminatory act and ending on the calculation date (usually the judgment date).
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Interest accrues from day to day, and is simple rather than compound (regulation 3, Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996). The rate payable depends to some degree on when and where the case was presented.An employee can recover a debt in relation to holiday pay from the National Insurance Fund, subject to a maximum of six weeks' pay (section 184(1)(c), Employment Rights Act 1996). One week's pay is subject to the current maximum statutory limit on a week's pay (see Week's pay).
In Scotland, regulation 3(2) provides that the interest accrues at the rate prescribed from time to time by the Act of Sederunt (Interest on Sheriff Court Decrees or Extracts) 1975, which sets the rate applicable to judgments of the Sheriff Courts under section 9 of the Sheriff Courts (Scotland) Extracts Act 1892. The current figure under section 9 is 8% each year, set by the Act of Sederunt (Interest on Sheriff Court Decrees or Extracts) 1993.
Unpaid tribunal awards
An employment tribunal has no power to award interest as a remedy in its own right. However, specific provision is made for interest to accrue on any award of compensation which remains unpaid. Before the Employment Tribunal Rules of Procedure 2013 came into force on 29 July 2013, interest accrued on an unpaid tribunal award only after 42 days. This has now changed. From 29 July 2013, interest on a tribunal award is payable from the day after the relevant decision day, unless the full amount is paid within 14 days after the decision day.
The current rate of interest is that contained in section 17 of the Judgments Act 1838 (article 4, Employment Tribunals (Interest) Order 1990 (SI 1990/479)). Since 1 April 1993 this rate has been 8% each year.