This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Detailed guide to interest on Employment Tribunal awards in England and Wales. Explains how interest is calculated before and after judgment, current statutory rates, legal rules under tribunal orders and discrimination regulations, and practical steps for claimants and employers when awards remain unpaid.
When an Employment Tribunal awards compensation to a claimant, that award may include interest. Interest on Employment Tribunal awards compensates a claimant for the time between when they should have received payment and when it is actually paid. It applies to unpaid awards and, in specific circumstances, to compensation awarded for discrimination before judgment. Understanding how interest works, when it applies, and how it is calculated is essential for both employees and employers involved in tribunal proceedings. This guide explains the legal framework, practical processes, and common questions about interest on Employment Tribunal awards in England and Wales.
Legal Framework for Interest on Tribunal Awards
Interest on Employment Tribunal awards has two distinct bases:
- Post‑judgment interest on unpaid awards under The Employment Tribunals (Interest) Order 1990.
- Pre‑judgment interest on discrimination awards under The Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996, as amended by the 2013 Regulations and backed by Section 139 of the Equality Act 2010.
These rules ensure that award amounts reflect the financial impact of delays in payment and, in discrimination cases, the lost economic value of delayed justice.
Post‑Judgment Interest on Unpaid Awards
When a tribunal decides an award and the respondent (usually the employer) does not pay the full amount on time, interest is payable automatically under the 1990 Order.
When Interest Starts
- Interest begins running from the day after the relevant decision day (the day the tribunal's written judgment was sent to the parties).
- If the respondent pays the full award within 14 days of that decision day, no post‑judgment interest is payable.
- Interest accrues on the unpaid portion of the award until payment is made.
Interest Rate
- The current statutory rate for post‑judgment interest is 8% per annum, calculated as simple interest (not compounded).
- The rate arises from the application of the Judgments Act 1838 and is fixed at 8% unless changed by statute.
Calculation Basics
- Interest is calculated on the net award (after deductions for tax, National Insurance, or recoupments to public authorities).
- Claimants receive interest based on the number of days the award remains unpaid after the decision day.
- Simple interest means the amount grows in direct proportion to the time outstanding.
Practical Example
If a tribunal awards £10,000 and the employer fails to pay within 14 days of the decision, interest at 8% per year begins from the next day. For each day unpaid, simple interest accrues at roughly £2.19 per day (£10,000 × 8% ÷ 365).
Interest on Discrimination Awards (Pre‑Judgment Interest)
Separate rules apply to discrimination claims, which include many types of claims under the Equality Act 2010 (for example, race, sex, disability discrimination).
Statutory Entitlement
- Tribunals must consider awarding interest on the different parts of a discrimination award, even without an application from the claimant.
- The rules aim to compensate for the delay between the discriminatory act and the award determination (not just unpaid awards).
What Parts of the Award Attract Interest
There are typically two components in such cases:
- Injury to feelings compensation, arising directly from discriminatory conduct.
- Financial loss (such as loss of earnings or other pecuniary losses).
How Interest Is Calculated
- Injury to feelings: Interest accrues from the date of the discriminatory act to the date of award calculation.
- Financial loss: Interest runs from a mid‑point date between the discriminatory act and the date the award is calculated (because those losses accrue over time).
- Rate of interest for both is currently 8% per annum, simple interest, although tribunals can depart from standard periods in exceptional cases.
- Interest on discrimination awards is included in the tribunal's compensation figure before any post‑judgment interest.
Interaction Between Pre‑ and Post‑Judgment Interest
Claimants may receive both pre‑judgment interest (added to the award for discrimination claims) and post‑judgment interest if the respondent delays payment. These are separate calculations with different starting points.
- Pre‑judgment interest aims to compensate for delays up to the judgment.
- Post‑judgment interest addresses the period after judgment when the award remains unpaid.
A tribunal's award documentation should specify how interest figures are calculated and applied, including any reasons if interest is not awarded where it might be expected.
Enforcement and Interest
A tribunal does not enforce its own awards. If a respondent does not pay:
- Claimants can apply to enforcement officers through civil courts (e.g., High Court Enforcement Officers).
- Interest due until payment continues to accrue and becomes part of the amount enforceable.
- Interest charges and enforcement fees may be added to the debt owed.
Common Practical Issues
Does Every Award Attract Interest?
Not all awards automatically attract pre‑judgment interest. Tribunals may decide not to award interest on discrimination components, but they must give written reasons for that decision.
What Is Excluded from Interest?
- Sums representing costs or expenses generally do not attract post‑judgment interest.
- Interest does not apply to amounts already paid within the relevant periods.
Rate Changes
While the current rate is 8%, statutory rates can change in future. Claimants and employers should check the relevant judgment or award documentation for the applicable rate at the time of calculation.
Key Takeaways
Interest on Employment Tribunal awards serves two purposes:
- Compensating claimants for delays in payment after a tribunal decision (post‑judgment interest at 8% simple interest), and
- Rewarding claimants for losses suffered between the discriminatory act and the judgment outcome in discrimination cases (pre‑judgment interest).
Understanding how interest operates helps claimants accurately calculate what they are owed and informs employers of their financial obligations if they fail to pay awards promptly.
