Small Business, Enterprise and Employment Bill (HC Bill 117)

authorised to act as an insolvency practitioner by the body designated by the
regulations after that time.

(7) Expressions used in this section which are defined for the purposes of Part 13
of the Insolvency Act 1986 have the same meaning in this section as in that Part.

(8) 5Section 139 makes further provision about regulations under this section which
designate an existing body.

(9) Schedule 11 makes supplementary provision in relation to the designation of a
body by regulations under this section.

139 Regulations under section 138: designation of existing body

(1) 10The Secretary of State may make regulations under section 138 designating an
existing body only if it appears to the Secretary of State that—

(a) the body is able and willing to exercise the functions that would be
conferred by the regulations, and

(b) the body has arrangements in place relating to the exercise of those
15functions which are such as to be likely to ensure that the conditions in
subsection (2) are met.

(2) The conditions are—

(a) that the functions in question will be exercised effectively, and

(b) where the regulations are to contain any requirements or other
20provisions prescribed under subsection (3), that those functions will be
exercised in accordance with any such requirements or provisions.

(3) Regulations which designate an existing body may contain such requirements
or other provisions relating to the exercise of the functions by the designated
body as appear to the Secretary of State to be appropriate.

140 25Regulations under section 138: timing and supplementary

(1) Section 138 and, accordingly, section 139 and subsections (3) and (4) below
expire at the end of the relevant period unless the power conferred by
subsection (1) of section 138 is exercised before the end of that period.

(2) The “relevant period” is the period of 7 years beginning with the day on which
30section 138 comes into force.

(3) Regulations under section 138 are subject to affirmative resolution procedure.

(4) If a draft of a statutory instrument containing regulations under section 138
would, apart from this subsection, be treated for the purposes of the Standing
Orders of either House of Parliament as a hybrid instrument, it is to proceed in
35that House as if it were not a hybrid instrument

Part 11 Employment

Whistleblowing

141 Protected disclosures: reporting requirements

(1) 5The Employment Rights Act 1996 is amended as follows.

(2) In Part 4A (protected disclosures), after section 43F insert—

“43FA Prescribed persons: duty to report on disclosures of information

(1) The Secretary of State may make regulations requiring a person
prescribed for the purposes of section 43F to produce an annual report
10on disclosures of information made to the person by workers.

(2) The regulations must set out the matters that are to be covered in a
report, but must not require a report to provide detail that would
enable either of the following to be identified—

(a) a worker who has made a disclosure;

(b) 15an employer or other person in respect of whom a disclosure
has been made.

(3) The regulations must make provision about the publication of a report,
and such provision may include (but is not limited to) any of the
following requirements—

(a) 20to send the report to the Secretary of State for laying before
Parliament;

(b) to include the report in another report or in information
required to be published by the prescribed person;

(c) to publish the report on a website.

(4) 25The regulations may make provision about the time period within
which a report must be produced and published.

(5) Regulations under subsections (2) to (4) may make different provision
for different prescribed persons.”

(3) In section 236 (orders and regulations)—

(a) 30in subsection (3), before “43K(4)” insert “43FA (but see subsection
(3A)),”;

(b) after subsection (3) insert—

“(3A) Subsection (3) does not apply to regulations under section 43FA
that contain only the provision mentioned in section 43FA(2),
35(3) or (4).”

Employment tribunals: failure to pay sums

142 Financial penalty for failure to pay sums ordered by employment tribunal etc

(1) The Employment Tribunals Act 1996 is amended as provided in subsections (2)
to (6).

(2) After section 37 insert—

“ Part 2A Financial penalties for failure to pay sums ordered to be paid or
settlement sums

37A 5Sums to which financial penalty can relate

(1) This section has effect for the purposes of this Part.

(2) “Financial award” means a sum of money ordered by an employment
tribunal, or on a relevant appeal, to be paid by an employer on a claim
involving the employer and a worker, other than a financial penalty
10under section 12A.

(3) “Settlement sum” means a sum payable by an employer to a worker
under the terms of a settlement in respect of which a certificate has been
issued under section 19A(1).

(4) “Relevant sum” means—

(a) 15a financial award, or

(b) a settlement sum.

(5) In subsection (2) “relevant appeal”, in relation to a financial award,
means an appeal against—

(a) the decision on the claim to which it relates,

(b) 20the making of the financial award,

(c) the amount of the award, or

(d) any decision made on an appeal within paragraphs (a) to (c) or
this paragraph.

(6) Sections 37B to 37D apply for the purposes of calculating the unpaid
25amount on any day of a relevant sum.

37B Financial award: unpaid amount

(1) In the case of a financial award, the unpaid amount on any day means
the amount outstanding immediately before that day in respect of—

(a) the initial amount of the financial award (see subsection (2)),
30and

(b) subject to subsection (4), interest payable in respect of the
financial award by virtue of section 14.

(2) The initial amount of a financial award is—

(a) in a case to which section 16 applies, the monetary award within
35the meaning of that section (see section 17(3)), and

(b) in any other case, the sum of money ordered to be paid,

adjusted in accordance with subsection (3).

(3) The initial amount of a financial award—

(a) includes (or, if it is the only amount the employer has been
40ordered to pay, comprises) any amount the employer has been
ordered by an employment tribunal to pay in respect of
employment tribunal fees;

(b) does not include—

(i) any other amount payable by virtue of section 13 or 13A;

(ii) any amount payable by virtue of section 34;

(iii) any other amount payable in respect of costs or
expenses.

(4) 5Interest in respect of the financial award included under subsection
(1)(b) in the calculation of the unpaid amount does not include interest
(if any) in respect of any amount excluded from the initial amount
under subsection (3).

(5) An amount in respect of a financial award is not to be regarded as
10outstanding—

(a) when the employer or worker could appeal against—

(i) the decision on the claim to which it relates,

(ii) the making of the financial award,

(iii) the amount of the award, or

(iv) 15any decision made on an appeal within sub-paragraphs
(i) to (iii) or this sub-paragraph,

but has not done so, or

(b) when the employer or worker has made such an appeal but the
appeal has not been withdrawn or finally determined.

37C 20Settlement sum: unpaid amount

(1) In the case of a settlement sum, the unpaid amount on any day means
the amount outstanding immediately before that day in respect of—

(a) the settlement sum, and

(b) interest (if any) calculated in accordance with the settlement
25(within the meaning of section 19A).

(2) Subject to section 37D(2) and (3), an amount in respect of a settlement
sum is not to be regarded as outstanding if the settlement sum is not
recoverable under section 19A(3).

37D Unpaid amount of relevant sum: further provision

(1) 30Subsections (2) and (3) apply where—

(a) a relevant sum is to be paid by instalments,

(b) any instalment is not paid on or before the day on which it is
due to be paid, and

(c) a warning notice (see section 37E) is given in consequence of the
35failure to pay that instalment (“the unpaid instalment”).

(2) For the purposes of calculating the unpaid amount for—

(a) that warning notice, and

(b) any penalty notice given in respect of that warning notice,

any remaining instalments (whether or not yet due) are to be treated as
40having been due on the same day as the unpaid instalment.

(3) Accordingly, the amount outstanding in respect of the financial award
or settlement sum is to be taken to be—

(a) the aggregate of—

(i) the unpaid instalment, and

(ii) 45any remaining instalments,

including, in the case of a settlement sum, any amount which is
not recoverable under section 19A(3) by reason only of not
being due,

(b) interest on those amounts calculated in accordance with section
537B(1)(b) or 37C(1)(b) (and subsection (2)).

(4) Subsections (2) and (3) are not to be taken to affect the time at which any
remaining instalment is due to be paid by the employer.

(5) Where a payment by an employer is made, or purported to be made, in
respect of a relevant sum, an enforcement officer may determine
10whether, and to what extent, the payment is to be treated as being—

(a) in respect of that relevant sum or instead in respect of some
other amount owed by the employer;

(b) in respect of the initial amount or interest on it, in the case of a
payment treated as being in respect of the relevant sum.

37E 15Warning notice

(1) This section applies where an enforcement officer considers that an
employer who is required to pay a relevant sum has failed—

(a) in the case of a relevant sum which is to be paid by instalments,
to pay an instalment on or before the day on which it is due to
20be paid, or

(b) in any other case, to pay the relevant sum in full on or before the
day on which it is due to be paid.

(2) The officer may give the employer a notice (a “warning notice”) stating
the officer’s intention to impose a financial penalty in respect of the
25relevant sum unless before a date specified in the warning notice (“the
specified date”) the employer has paid in full the amount so specified
(“the specified amount”).

This is subject to subsection (3).

This is subject to subsection (3).

(3) 30Where a penalty notice has previously been given in respect of the
relevant sum, the officer may not give a warning notice until—

(a) 3 months have elapsed since the end of the relevant period
(within the meaning of section 37H) relating to the last penalty
notice given in respect of the relevant sum, and

(b) 35if the relevant sum is to be paid by instalments, the last
instalment has become due for payment.

(4) The specified date must be after the end of the period of 28 days
beginning with the day on which the warning notice is given.

(5) The specified amount must be the unpaid amount of the relevant sum
40on the day on which the warning notice is given.

(6) A warning notice must identify the relevant sum and state—

(a) how the specified amount has been calculated;

(b) the grounds on which it is proposed to impose a penalty;

(c) the amount of the financial penalty that would be imposed if no
45payment were made in respect of the relevant sum before the
specified date;

(d) that the employer may before the specified date make
representations about the proposal to impose a penalty,
including representations—

(i) about payments which the employer makes in respect of
5the relevant sum after the warning notice is given;

(ii) about the employer’s ability to pay both a financial
penalty and the relevant sum;

(e) how any such representations may be made.

(7) The statement under subsection (6)(e) must include provision for
10allowing representations to be made by post (whether or not it also
allows them to be made in any other way).

(8) If the employer pays the specified amount before the specified date, the
relevant sum is to be treated for the purposes of this Part as having been
paid in full.

(9) 15Subsection (8) is not to be taken to affect the liability of the employer to
pay any increase in the unpaid amount between the date of the warning
notice and the date of payment.

37F Penalty notice

(1) This section applies where an enforcement officer—

(a) 20has given a warning notice to an employer, and

(b) is satisfied that the employer has failed to pay the specified
amount in full before the specified date.

(2) The officer may give the employer a notice (a “penalty notice”)
requiring the employer to pay a financial penalty to the Secretary of
25State.

(3) A penalty notice must identify the relevant sum and state—

(a) the grounds on which the penalty notice is given;

(b) the unpaid amount of the relevant sum on the specified date
and how it has been calculated;

(c) 30the amount of the financial penalty (see subsections (4) to (6));

(d) how the penalty must be paid;

(e) the period within which the penalty must be paid;

(f) how the employer may pay a reduced penalty instead of the
financial penalty;

(g) 35the amount of the reduced penalty (see subsection (8));

(h) how the employer may appeal against the penalty notice;

(i) the consequences of non-payment.

(4) Subject to subsections (5) and (6), the amount of the financial penalty is
50% of the unpaid amount of the relevant sum on the specified date.

(5) 40If the unpaid amount on the specified date is less than £200, the amount
of the penalty is £100.

(6) If the unpaid amount on the specified date is more than £10,000, the
amount of the financial penalty is £5,000.

(7) The period specified under subsection (3)(e) must be a period of not less
than 28 days beginning with the day on which the penalty notice is
given.

(8) The amount of the reduced penalty is 50% of the amount of the financial
5penalty.

(9) Subsection (10) applies if, within the period of 14 days beginning with
the day on which the penalty notice is given, the employer—

(a) pays the unpaid amount of the relevant sum on the specified
date (as stated in the notice under subsection (3)(b)), and

(b) 10pays the reduced penalty to the Secretary of State.

(10) The employer is to be treated—

(a) for the purposes of this Part, as having paid the relevant sum in
full, and

(b) by paying the reduced penalty, as having paid the whole of the
15financial penalty.

(11) Subsection (10)(a) is not to be taken to affect the liability of the employer
to pay any increase in the unpaid amount of the relevant sum between
the specified date and the date of payment.

37G Appeal against penalty notice

(1) 20An employer to whom a penalty notice is given may, before the end of
the period specified under section 37F(3)(e) (period within which
penalty must be paid), appeal against—

(a) the penalty notice; or

(b) the amount of the financial penalty.

(2) 25An appeal under subsection (1) lies to an employment tribunal.

(3) An appeal under subsection (1) may be made on one or more of the
following grounds—

(a) that the grounds stated in the penalty notice under section
37F(3)(a) were incorrect;

(b) 30that it was unreasonable for the enforcement officer to have
given the notice;

(c) that the calculation of an amount stated in the penalty notice
was incorrect.

(4) On an appeal under subsection (1), an employment tribunal may—

(a) 35allow the appeal and cancel the penalty notice;

(b) in the case of an appeal made on the ground that the calculation
of an amount stated in the penalty notice was incorrect, allow
the appeal and substitute the correct amount for the amount
stated in the penalty notice;

(c) 40dismiss the appeal.

(5) Where an employer has made an appeal under subsection (1), the
penalty notice is not enforceable until the appeal has been withdrawn
or finally determined.

37H Interest and recovery

(1) This section applies if all or part of a financial penalty which an
employer is required by a penalty notice to pay is unpaid at the end of
the relevant period.

(2) 5The relevant period is—

(a) if no appeal is made under section 37G(1) relating to the penalty
notice, the period specified in the penalty notice under section
37F(3)(e);

(b) if such an appeal is made, the period ending when the appeal is
10withdrawn or finally determined.

(3) The outstanding amount of the financial penalty for the time being
carries interest—

(a) at the rate that, on the last day of the relevant period, was
specified in section 17 of the Judgments Act 1838,

(b) 15from the end of the relevant period until the time when the
amount of interest calculated under this subsection equals the
amount of the financial penalty,

(and does not also carry interest as a judgment debt under that section).

(4) The outstanding amount of a penalty and any interest is recoverable—

(a) 20in England and Wales, if the county court so orders, under
section 85 of the County Courts Act 1984 or otherwise as if the
sum were payable under an order of the county court;

(b) in Scotland, by diligence as if the penalty notice were an extract
registered decree arbitral bearing a warrant for execution issued
25by the sheriff court of any sheriffdom in Scotland.

(5) Any amount received by the Secretary of State under this Part is to be
paid into the Consolidated Fund.

37I Withdrawal of warning notice

(1) Where—

(a) 30a warning notice has been given (and not already withdrawn),

(b) it appears to an enforcement officer that—

(i) the notice incorrectly omits any statement or is incorrect
in any particular, or

(ii) the warning notice was given in contravention of section
3537E(3), and

(c) if a penalty notice has been given in relation to the warning
notice, any appeal made under section 37G(1) has not been
determined,

the officer may withdraw the warning notice by giving notice of
40withdrawal to the employer.

(2) Where a warning notice is withdrawn, no penalty notice may be given
in relation to it.

(3) Where a warning notice is withdrawn after a penalty notice has been
given in relation to it—

(a) 45the penalty notice ceases to have effect;

(b) any sum paid by or recovered from the employer by way of
financial penalty payable under the penalty notice must be

repaid to the employer with interest at the appropriate rate
running from the date when the sum was paid or recovered;

(c) any appeal under section 37G(1) relating to the penalty notice
must be dismissed.

(4) 5In subsection (3)(b), the appropriate rate means the rate that, on the
date the sum was paid or recovered, was specified in section 17 of the
Judgments Act 1838.

(5) A notice of withdrawal under this section must indicate the effect of the
withdrawal (but a failure to do so does not make the notice of
10withdrawal ineffective).

(6) Withdrawal of a warning notice relating to a relevant sum does not
preclude a further warning notice being given in relation to that sum
(subject to section 37E(3)).

37J Withdrawal of penalty notice

(1) 15Where—

(a) a penalty notice has been given (and not already withdrawn or
cancelled), and

(b) it appears to an enforcement officer that—

(i) the notice incorrectly omits any statement required by
20section 37F(3), or

(ii) any statement so required is incorrect in any particular,

the officer may withdraw it by giving notice of the withdrawal to the
employer.

(2) Where a penalty notice is withdrawn and no replacement penalty
25notice is given in accordance with section 37K—

(a) any sum paid by or recovered from the employer by way of
financial penalty payable under the notice must be repaid to the
employer with interest at the appropriate rate running from the
date when the sum was paid or recovered;

(b) 30any appeal under section 37G(1) relating to the penalty notice
must be dismissed.

(3) In a case where subsection (2) applies, the notice of withdrawal must
indicate the effect of that subsection (but a failure to do so does not
make the withdrawal ineffective).

(4) 35In subsection (2)(a), “the appropriate rate” means the rate that, on the
date the sum was paid or recovered, was specified in section 17 of the
Judgments Act 1838.

37K Replacement penalty notice

(1) Where an enforcement officer—

(a) 40withdraws a penalty notice (“the original penalty notice”)
under section 37J, and

(b) is satisfied that the employer failed to pay the specified amount
in full before the specified date in accordance with the warning
notice in relation to which the original penalty notice was given,

45the officer may at the same time give another penalty notice in relation
to the warning notice (“the replacement penalty notice”).

(2) The replacement penalty notice must—

(a) indicate the differences between it and the original penalty
notice that the enforcement officer reasonably considers
material, and

(b) 5indicate the effect of section 37L.

(3) Failure to comply with subsection (2) does not make the replacement
penalty notice ineffective.

(4) Where a replacement penalty notice is withdrawn under section 37J, no
further replacement penalty notice may be given under subsection (1)
10pursuant to the withdrawal.

(5) Nothing in this section affects any power that arises apart from this
section to give a penalty notice.

37L Effect of replacement penalty notice

(1) This section applies where a penalty notice is withdrawn under section
1537J and a replacement penalty notice is given in accordance with
section 37K.

(2) If an appeal relating to the original penalty notice has been made under
section 37G(1) and has not been withdrawn or finally determined
before the time when that notice is withdrawn—

(a) 20the appeal (“the earlier appeal”) is to have effect after that time
as if it were against the replacement penalty notice, and

(b) the employer may exercise the right under section 37G to appeal
against the replacement penalty notice only after withdrawing
the earlier appeal.

(3) 25If a sum was paid by or recovered from the employer by way of
financial penalty under the original penalty notice—

(a) an amount equal to that sum (or, if more than one, the total of
those sums) is to be treated as having been paid in respect of the
replacement penalty notice, and

(b) 30any amount by which that sum (or total) exceeds the amount of
the financial penalty payable under the replacement penalty
notice must be repaid to the employer with interest at the
appropriate rate running from the date when the sum (or, if
more than one, the first of them) was paid or recovered.

(4) 35In subsection (3)(b) “the appropriate rate” means the rate that, on the
date mentioned in that provision, was specified in section 17 of the
Judgments Act 1838.

37M Enforcement officers

The Secretary of State may appoint or authorise persons to act as
40enforcement officers for the purposes of this Part.

37N Power to amend Part 2A

(1) The Secretary of State may by regulations—

(a) amend subsection (5) or (6) of section 37F by substituting a
different amount;

(b) 45amend subsection (4) or (8) of that section by substituting a
different percentage;