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Employment Tribunals

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Employment Tribunals

Employment Tribunals (ETs) are judicial bodies established to resolve disputes between employers and employees over employment rights. They also resolve disputes involving prospective or former employees and, in some cases, other workers (for example casual workers). This note provides an overview of practice and procedure in the employment tribunals, including bringing and defending claims, the tribunal's jurisdiction, as well as preparation for and attendance at hearings

The Over-Riding Objective

The ET is a court of law and is subject to an overriding objective which ETs must take into account when interpreting the rules of procedure and in deciding issues affecting the conduct of ET proceedings. The governing principle is that ETs deal with cases fairly and justly, and at proportionate cost. Whenever an ET makes a procedural decision it must, so far as practicable, consider:

  • keeping the parties on equal footing;
  • dealing with the case proportionately (in relation to how complex and important the issues are) and flexibly;
  • avoiding unnecessary formality or delay; and
  • saving expense.

Both the Claimant (the person bringing the claim; the individual) and Respondent (the person who the claim is brought against; the employer/company) are required to assist in achieving this objective.

ACAS Early Conciliation

Prior to an individual being able to bring a claim in the ET, in most circumstances they are required to go through a process known as Early Conciliation (EC). During this process, the Advisory Conciliation and Arbitration Service (ACAS) liaises with both parties to resolve an employment dispute without recourse to the ET. EC applies in the majority of ET claims and, unless a relevant exemption applies, it is mandatory for Claimants to instigate this process prior to lodging a claim. However, there is no obligation on either a Claimant or Respondent company to reach an agreement to settle a matter prior to a claim being lodged. The EC period is one calendar month however if both parties agree it can be extended by up to two weeks.

The EC Procedure

  1. A potential Claimant who wishes to issue proceedings must first notify ACAS of their intention to bring an ET claim. They can do this by either submitting an EC form online or by post. Alternatively, they can telephone ACAS who will complete the EC form for them.
  2. ACAS will contact the potential Claimant to obtain details of the complaint. If they agree that they want to proceed with EC, ACAS will assign a conciliator to approach the Respondent to discuss the matter and explore the option of settlement.
  3. If a settlement is reached via the EC process, it will be recorded in a binding settlement agreement known as a COT3 agreement.
  4. If ACAS are unable to make contact with the potential Claimant, or if either party does not wish to participate in EC, ACAS will close the case and issue an EC certificate. An EC certificate will also be issued if the process is not successful despite active participation by both parties, or if the EC period expires without an agreement being reached.

An ET claim will not be accepted unless an EC certificate has been issued by ACAS and a potential Claimant will be required to enter their EC certificate number on their ET1 form to show the EC process has been followed. If a claim is issued, both parties will still be able to use the services of ACAS to reach a settlement at any time after the claim has been submitted and before judgement has been given by the ET.

A separate EC form is required for each Respondent a potential Claimant wishes to purse a claim against. For example, in a discrimination claim, a Claimant may wish to pursue a claim against both the discriminating colleague and their employer, or in a TUPE situation a claim may be brought against both the transferor and transferee. Whilst the various EC certificates in this situation may have different dates, Claimants will still be expected to comply with applicable time limits for submitting their ET1 (see 'The Claim: Time Limits and Extensions of Time' below). In order to do this, a Claimant may be required to lodge a claim against a particular Respondent and then make an application to have a further Respondent or Respondents added at a later date.

There have been a number of cases where individuals have failed to correctly identify the name of the Respondent on the EC certificate, or where a certificate has been obtained in relation to only one Respondent when the claim is brought against multiple Respondents. ETs currently take a relatively lenient approach in exercising their discretion in relation to these types of issues and it is likely that ETs will not go out of their way to prevent an individual bringing an ET claim where there has been a technical breach.

Complications can occur where new claims arise following the issue of the EC certificate and submission of the claim to the ET, or where new claims arise after the EC process has concluded but where an ET claim has not yet been lodged (for example where an individual lodges an initial claim for discrimination and is subsequently dismissed). In these circumstances, case law suggests that it will not be necessary for the individual to go through the EC process again, provided that the subsequent cause of action is related. If the subsequent cause of action is sufficiently different or unrelated to the circumstances that gave rise to the initial EC process, it will be necessary for the individual to go through this process again prior to lodging a claim.

The Claim: Time Limits and Extensions of Time

Time Limits

All applications to ETs must be presented within a certain time limit, which varies according to the type of claim, but most must be presented within three months minus one day of the date of the relevant event. For this purpose the 'relevant event' may be the effective date of termination of employment in an unfair dismissal case, or the act (or last act) of discrimination in a discrimination case.

The principal exceptions to the three month time limit are claims for statutory redundancy payments and equal pay, the time limit for these claims (when brought in an ET) is six months. Moreover, breach of contract claims in the ET must be brought within six years of the breach and three months of the effective date of termination.

For a minority of claims, working out the point at which the time limit starts to run can be fairly complex, for example; in relation to some whistleblowing claims or claims for failure to make reasonable adjustments. Legal advice should be sought if a specific issue arises.

Impact of EC process on time limits

During the EC process, time limits are put on hold to enable a potential Claimant to comply with the process. The time for issuing a claim will start to run again once the EC certificate is issued. This has the following impact on the calculation of time limits:

  • If the ordinary limitation period has already started before EC commences, the time taken between the day after commencement of EC to the date the EC certificate is deemed to be received is added on to the limitation period.  
  • If the ordinary limitation period would have expired during the period beginning on the day ACAS receives the EC request and one month after the EC certificate is received, the deadline to present the claim will be extended to one month after receipt of the EC certificate.

Again, legal advice should be sought if a specific issue arises.

If the claim form arrives at a tribunal office before midnight on the last day of the limitation period (as extended by the EC process) it is presented in time.

Extensions of Time

If a Claimant has failed to present their claim to the ET within the relevant timeframe, the claim will not be accepted unless the ET exercises its discretion to extend the time limit. There are two main categories of discretion under which the ET may extend the time limit, enabling them to accept the claim:

  • It was not reasonably practicable for the Claimant to present the claim in time. This test applies to unfair dismissal and most other claims.
  • It would be just and equitable to accept the claim outside the normal time limit. This test applies in discrimination claims.

The Application and Fees

All claims must be made on the prescribed ET1 form, which is available on the gov.uk website. There is currently no fee payable to lodge a claim in the ET.

Rejection

Under the Employment Tribunal rules a claim (or part of a claim where appropriate) will be rejected on the following grounds:

  • It has not been made on the prescribed form (ET1 form)
  • It does not contain the name and address of each Claimant and Respondent
  • It does not contain one of the following:
    • an early conciliation number;
    • confirmation that the claim does not institute any relevant proceedings; or
    • confirmation that one of the early conciliation exemptions applies.
  • An employment judge considers it is either:
    • one in which the ET has no jurisdiction to consider;
    • is in a form which cannot sensibly be responded to; or
    • is otherwise an abuse of the process.

If the claim (or part) is rejected, the ET1 will be returned to the Claimant with a notice of rejection explaining why it has been rejected. The Claimant can apply for reconsideration either on the basis that the decision to reject was wrong or that the notified defect can be rectified. The Claimant may also request a hearing for reconsideration. An application for reconsideration needs to be in writing and presented to the ET within 14 days of the date the notice of rejection was sent.

Potential Unlawful Treatment Claims under Equality Act 2010

The Equality Act 2010 sets out statutory question and answer forms which could be used by Claimants and Respondents in relation to potential unfair treatment under the Equality Act. This questionnaire procedure was replaced in April 2014 by ACAS guidance: "Asking and responding to questions of discrimination in the workplace". It is advisable for employers to follow this guidance should questions be asked by applicants, employees or former employees in respect of any alleged treatment. So, although the formal questionnaire process has now been scrapped employers should still be aware of the possibility for Claimants or potential Claimants to ask questions relating to potential discriminatory treatment, and that any answers are likely to be considered by the ET should a claim be issued subsequently.

The Response: Time Limits and Extensions of Time

ET Responses

The ET will send a copy of the Claimant's ET1 to the Respondent. The Respondent then has 28 days from the date that the ET1 form was sent in which to respond. Responses must be made on the prescribed ET3 form.

Extensions of Time

The Respondent may apply to the ET for an extension of time before submitting the response. Such application can be made before or after the original 28 day deadline has expired. The application must:

  • be in writing;
  • be copied to the Claimant;
  • set out the reasons why the extension is sought;
  • state whether the Respondent requests a hearing; and
  • where the original time limit has expired, submit a draft of the response the Respondent wishes to submit or an explanation of why that is not possible.

The Claimant then has 7 days to oppose the application. Should they wish to do so, they must submit written reasons for their opposition.

Rejection

Under the Employment Tribunal Rules 2013, a response may be rejected if:

  • it is not on the prescribed form;
  • it does not set out the Respondent's full name and address;
  • it does not state whether the Respondent wishes to resist any part of the claim; or
  • it is received outside the specified deadline, unless it is accompanied by an application for an extension.

If a response is rejected, the ET3 will be returned to the Respondent who can apply for a reconsideration of the rejection on the grounds that the decision to reject was wrong or that the notified defect can be rectified.

The Role of ACAS

As set out above, ACAS are involved in EC process prior to a claim being lodged, however ACAS also act as an impartial intermediary after proceedings have been issued. An ACAS officer usually contacts each party by letter or telephone after a claim has been made to the ET. The officer will try and promote settlement between the parties where they both request it or if the officer considers that they have a reasonable prospect of successfully negotiating a settlement in the absence of a request from the parties.

Usually, where an officer has been involved with the parties in the EC process, the case will be referred back to that same officer. The ACAS officer has no duty to advise on the merits of the claim and there is no obligation to enter into discussions with ACAS. As an organisation, ACAS are prohibited from disclosing information relating to a worker, employer or trade union which they hold in connection with the provision of their services.

If a settlement is reached through ACAS it will be binding and effective. The terms of the settlement will be recorded on a COT3 form which will be signed by the parties or their representatives. Settling through ACAS can avoid the unpleasantness of an ET hearing and the extra cost and management time of attending an ET hearing.

Preliminary Hearing

A preliminary hearing is an initial hearing that the ET may decide to order on its own initiative or following the application of one of the parties. The following issues may be considered and/or determined at a preliminary hearing:

  • Whether to strike out a claim or response
  • Whether a deposit order should be made
  • The possibility of settlement or alternative dispute resolution
  • Preliminary issues such as:
    • whether there has been a dismissal
    • whether all or part of the claim is out of time
    • whether an individual is of employee status
    • whether an individual has the required length of service to pursue a particular claim
    • whether any medical condition of the Claimant meets the definition of disability under the Equality Act 2010

An employment judge has the power to direct that a preliminary hearing can be treated as a final hearing and vice versa, provided that they are satisfied that neither party will be substantially prejudiced by the change. However, in practice this is not something that routinely happens.

Where an unrepresented individual lacks capacity to conduct litigation and would have no means of accessing justice or achieving a remedy for a legal wrong, it is within the ET's power to make an order appointing a litigation friend as a procedural matter.

However, the majority of preliminary hearings in the ET are procedural hearings relating to the conduct of claims generally, for example, the timing of disclosure of documents and exchange of witness statements. A final hearing may also be fixed at a preliminary hearing, where parties have the opportunity to provide their dates of unavailability to attend, or shortly after.

Final Hearing

A final hearing is a hearing that decides whether the claim succeeds or fails and determines what remedy or compensation is appropriate. In some cases, there may be different final hearings for different issues, for example liability, remedy or costs.

The parties will be given at least 14 days notice of the date of the final hearing. At the hearing the parties can represent themselves or use a lawyer, trade union official (or other representative) or even a friend to act on their behalf.

Preparing for the Final Hearing

Prior to the final hearing there is likely to have been significant work undertaken by both parties, or their legal representatives, in preparation for this. In the ETs in England and Wales the parties are usually ordered to disclose to the other side any documents in their possession or control that are relevant to the matter. It is then for one party (usually the Respondent company) to collate these documents into a hearing bundle, which will be used during the Final Hearing.

Each party is also able to call individuals to attend the final hearing as witnesses. The ET usually makes an order for these individuals to produce witness statements, which are exchanged in advance of the hearing, so that both parties are aware of what they will say.

The advance disclosure of documents and preparation of witness statements is a feature of the ETs in England and Wales, however in Scotland the ET does not operate in this same way; where the parties bring their relevant disclosures (documents) to the hearing and give their evidence without a pre prepared statement.

Throughout an ET hearing both parties will refer to the hearing bundle containing the ET1 and ET3 forms and any other documents relevant to the claim. As part of the hearing both parties may call individuals to give evidence and be questioned on the content of their witness statements.

It is crucially important that all witnesses are fully prepared for the final hearing. Giving evidence can be a nerve wracking experience for individuals and it is important that they are well prepared and feel properly supported throughout the process. The strength of witness evidence is often crucially important to the outcome of the hearing and so they should be fully aware of what to expect, see:

[TP38] Witness Guide to Employment Tribunal

This document can be provided to all witnesses for the company in advance of the hearing to assist them in their preparations.

Length of Proceedings

The parties will be notified in advance the time that has been allocated for the hearing. Basic contractual disputes may only be one or two hours in duration, whereas  an unfair dismissal case may be listed for one day or longer. Complex disputes, such as those related to discrimination or equal pay, may have been allocated a week or even longer.

The Judgment

Unless the ET 'reserves' its judgment, the Employment Judge will announce the judgment at the end of the hearing. If the judgment is reserved the parties will receive it in writing at a later date. This may happen in complicated cases or if there is not enough time on the day of the hearing to announce the judgment.

If the claim succeeds, the ET will normally deal with remedy at the hearing and the time that has been set aside for the hearing will usually include time for this. However, in some circumstances the ET may decide to give judgment and list the matter for a remedies hearing at a later date in order to decide what remedy or compensation the Claimant should be awarded.

If the ET is unable to reach a decision within the time allocated to the case it may adjourn the hearing to be continued at a later date or reserve judgment and give it in writing at a later date.

The ET will always send a written judgment to the parties or their representatives. Written reasons for the judgment will also be provided if the parties ask for them at the hearing or they make a written request to the ET within 14 days of the date that the judgment was sent to them.

All Employment Tribunal judgements are now collated and published on a government website, which can be accessed publically:

https://www.gov.uk/employment-tribunal-decisions

There is no ability to remove judgements from the website and therefore employers should be aware of the potential risk of adverse publicity, in particular where written reasons for the judgement are requested and the company has been criticised by the Employment Judge. 

Appeals

A party can appeal an ET decision only on the basis that the ET made an error of law in reaching their decision or if the ET decision was perverse. If either party wishes to appeal against the decision of the ET they will need a copy of the judgment and the ET's full written reasons for making it.

The appeal must be lodged with the Employment Appeal Tribunal (EAT) within 42 days from the date on which the written reasons were sent to the parties where:

  • written reasons have been requested orally at the hearing;
  • written reasons have been requested in writing within 14 days of the written record of the judgment; or
  • reasons for the judgment were reserved and given in writing by the ET at a later date.

Where the above does not apply, the appeal must be lodged with the EAT within 42 days of the date when the judgment was sent to the parties.

These are strict time limits and run even where there has been an administrative error in the sending process, for example where the written reasons have been sent to the wrong address.

Remedies

Unfair Dismissal

If the ET finds that a complaint of unfair dismissal is well founded, it will then decide what remedy to award. It may make an order for any of the following remedies:

  • Reinstatement – which orders the employer to treat the Claimant as if they had not been dismissed.
  • Re-engagement – which orders the employer to engage the Claimant in either employment comparable to that from which they were dismissed or other suitable employment.
  • Compensation – this is the most common type of award and is often the only award made. When the ET makes an award for compensation for unfair dismissal, the award will usually consist of a basic award and a compensatory award:
    • Basic award – this is simply a multiple of a week's pay according to a formula. The formula takes into account years of service and the age of the Claimant. The basic award is not related to loss suffered and in most cases will be the same as that of a statutory redundancy payment.
    • Compensatory award – this is aimed at compensating the employee for the financial loss suffered as a result of being dismissed. The award often includes compensation under headings such as loss of earnings, loss of fringe benefits (for example entitlement to holiday pay or loss of company car), loss of pension rights, loss of statutory rights and expenses for job-hunting or the cost of setting themselves up in a business or relocating to find work. The compensatory award is subject to a maximum limit of either 1 year's gross salary, or a set sum that usually increases on a yearly basis (whichever is the lower) as set out in the Statutory Rates and Limits Table.

When deciding whether or not to make an order for reinstatement or re-engagement the ET will consider the wishes of the employee, whether they contributed to their dismissal and also how practicable it is for the employer to reinstate or re-engage the employee.

Unlawful Discrimination

If a Claimant succeeds in a discrimination claim, the ET may make an order for any of the following remedies:

  • Recommendation – an appropriate recommendation may require the Respondent to take certain steps within a certain time frame to reduce the adverse effects which the claim has shown to have had on the Claimant (for example provide a reference).
  • Declaration – the ET may make a declaration that the employer has discriminated against the Claimant.
  • Compensation – this is the usual remedy when a Claimant brings a successful discrimination claim. There is no limit on the compensation that can be awarded. It should comprise all loss directly caused by the act of discrimination including:
    • past and future loss of earnings;
    • loss of opportunity; and
    • injury to feelings – this award is often substantial in its own right. The current maximum guideline award for injury to feelings is £42,900 (although the sum may be more than this in exceptional cases). This sum is also subject to regular inflationary increases.

Adjustment to Tribunal Awards

Where the ACAS Code of Practice on Disciplinary and Grievance Procedures applies, and there has been an unreasonable failure by either the employer or employee to comply with any provision of the code, the ET may at its discretion increase or decrease any compensation award by no more than 25%, depending on which party was at fault. The ET will only make such an increase or reduction in award if it considers it is just and equitable in all the circumstances to do so. This adjustment applies to the compensatory part of an award only.

Costs

In most ET cases, each party will pay their own costs. The ET may order one side to pay costs for the other in certain circumstances (which can include costs incurred by an in-house lawyer).

In practice, cost orders are rare; they are typically the exception not the rule and are awarded in less than 2% of cases. An ET may make a cost order if one side has behaved unreasonably in the way they have dealt with the case, for example lying to or misleading the ET or defending a matter which the defending party has no reasonable prospect of defending or if an ET thinks that a claim was so weak that it should not have been brought. The maximum costs order that can be awarded at the ET without detailed assessment is £20,000. A higher award can be made subject to detailed assessment.

Financial Penalties

ETs have the power to impose a penalty of up to 50% of any compensation where the employer is found to have breached the employee's rights and there are 'aggravating features' to the breach. This penalty is subject to a minimum of £100 and a maximum of £5,000 and will be reduced by 50% if it is paid within 21 days. This payment goes directly to the government, and not to the Claimant.

Enforcement

There is a scheme for penalising employers who fail to pay tribunal awards or settlement sums under a COT3, although this does not apply to privately negotiated settlements.

If the employer fails to pay a tribunal award or settlement sum under a COT3 to the Claimant, the Claimant can ask to have the employer fined by completing an ET penalty notice form.

Under the scheme, unpaid tribunal awards include costs and accrued interest and unpaid settlement amounts include accrued interest. Once an ET penalty form has been submitted:

  • The employer will be issued with a warning notice that a financial penalty will be imposed unless payment is made within a specified period of 28 days.
  • If the employer fails to pay the sum within 28 days, a penalty notice may then be issued against the employer. The penalty will be 50% of the unpaid relevant sum, subject to a minimum of £100 and maximum of £5,000.
  • If the employer pays within 14 days of the penalty notice, the sum will be reduced by 50%.
  • An employer has 28 days from the date of the penalty notice to appeal to an ET against it on the following grounds:
  1. it was issued on incorrect grounds;
  2. it was unreasonable for the enforcement officer to issue the notice; or
  3. the amount payable was incorrectly calculated.
  • Interest will continue to accrue on a financial penalty if it is not paid within a specified period.

There are four traditional methods of enforcing an outstanding judgment debt through the civil courts: writs and warrants of control; attachment of earnings orders; third party debt orders; and, charging orders. In addition, the court can appoint a receiver to collect money owed to a judgment debtor, in order to pay the judgment creditor. However, the appointment of a receiver is likely to be prohibitively expensive particularly when there is a risk that the judgment creditor will recover little, if any, money.

This document has been created by, or on behalf of ESP Ltd, as a general document and as a guide in relation to its subject matter and has not been bespoke drafted for you or the specific circumstances in which you are looking to use it. Prior to using this document and undertaking any HR process you must consult your organisation’s own policies and procedures to ensure that you do not do anything in conflict with your own policies and procedures.  If in any doubt as to how to use this document or, if you require any legal advice, please feel free to contact ESP Ltd on 0333 006 2929 and our legal team will be more than happy to assist.  ESP Ltd will not be liable in any way for any actions undertaken by you or your use of this document unless we have been consulted regarding your use of this document as legal advisor to your business or have bespoke drafted any documentation in response to a specific support request.