As employers, we always strive to resolve any claims of unfair treatment internally, either informally or through the formal grievance procedure. However, in some cases, this isn’t possible. In these cases, an employee can bring a claim against you in an employment tribunal.
If a claim is made against you and your organisation, it’s important to act quickly. 76% of all employment tribunal cases between April and December 2023 did not progress to a tribunal hearing, so as long as you follow the correct procedures you can achieve the best outcome for your company.
In this guide, we’ll explain what an employment tribunals are, what claims employees can make and what to expect during the entire process from Acas early conciliation to the final hearing.
What is an employment tribunal?
An employment tribunal is a judicial body that resolves disputes between employees and employers. An employee can make a claim against you if they believe that you have treated them unlawfully.
Employees can bring a claim to tribunal if they think you haven’t settled a dispute with them in a fair and legal way, or if they want to challenge the result of a dispute which ended in their dismissal.
The entire employment tribunal process can last a few months to over a year, depending on how complex the case is and whether it can be settled before a hearing. However, employees have a deadline for claims, meaning that they must start Acas early conciliation or submit a claim before time runs out. This is known as the ‘limitation date’, and we’ll go into more detail about this later.
What claims can employees make?
Employees can make a claim to an employment tribunal if they think you have treated them unlawfully. Unlawful treatment can include:
- Unfair dismissal
- Discrimination at work
- Breach of contract
- Equal pay
- Unauthorised deductions from wages
Employees must make a claim or start Acas early conciliation before the limitation date, otherwise their claim could be rejected.
Time limits
There’s a limitation date for any claim that an employee wants to bring. That date varies depending on the type of claim they are making.
Usually, the employee has three months minus one day from the date of the unlawful treatment or dismissal that they want to bring a claim for. This is usually for unfair dismissal or discrimination claims.
However, there are some cases where an employee has longer to make a claim. Statutory redundancy or equal pay for equal work claims have a six-month limitation date.
The employee must start Acas early conciliation or submit their claim to the employment tribunal before the limitation date, otherwise their claim could be rejected. Acas early conciliation is an opportunity for the employee to settle their dispute with you before it reaches tribunal.
It’s also important to note that there are rare circumstances where an employee may be able to submit a claim outside of these periods. If you find that your employee is out of time to make their claim, it’s best to speak to a solicitor to get advice on whether their claim may be considered. It will have to pass strict requirements, and late submissions are extremely rare, but it’s best to get legal advice before you assume that your employee’s claim will be rejected.
Acas and early conciliation
The Advisory, Conciliation and Arbitration Service (Acas) is a public body that provides free and impartial advice, training and help to resolve workplace issues. It provides these services to both employers and employees.
All employees who want to submit a claim must inform Acas before they do so. Then, Acas will offer the employee an opportunity to settle their dispute with you through early conciliation.
Early conciliation is designed to help you come to an agreement with your employee without having to go to tribunal. It’s a voluntary process – both you and the employee can refuse it, but it makes sense to try to resolve the dispute before it goes any further.
There are lots of benefits of using early conciliation, both for you and the employee:
- It’s free – but you will have to pay for any legal advice you’d like during the process
- It’s quicker than going to tribunal
- There’s less paperwork involved than with a tribunal
- You can agree outcomes, such as a settlement or some that aren’t available if the employee goes to tribunal, such as a job reference
Early conciliation usually takes place over the phone and lasts up to six weeks. The employee can choose what Acas can and can’t share with you. During the early conciliation process, and the tribunal if the claim makes it that far, you will usually be called the ‘respondent’ and the employee will be called the ‘claimant’.
Is early conciliation a requirement?
No. While an employee must inform Acas that they intend to bring an employment tribunal claim, they don’t have to settle their claim through early conciliation. However, it can be less costly and much less stressful for them if they do use the early conciliation process.
You, as the employer, also have the opportunity to refuse to engage in the early conciliation process. If you decide not to engage, then the process will end and the next step will be a hearing. The employee could choose to withdraw their claim before it reaches tribunal.
What is an Acas early conciliation conciliator’s role?
If you and the employee decide to engage in the early conciliation process, the conciliator will facilitate the discussion between you both. They will speak to you and the employee separately on the phone, and propose any settlement offers that you or the employee makes.
The conciliator can’t help you prepare for an employment tribunal, offer advice or force any agreement on either party. They are there to help explain the process and discuss possible resolutions that may avoid a tribunal hearing, but they must remain impartial.
Do I need legal representation during early conciliation?
You (and the employee) are entitled to appoint legal representatives to act on your behalf during the early conciliation process, and it’s a good idea to do this. The legal representative will speak with the conciliator instead of yourself, so it’s vital that they fully understand the case and your stance.
Your representative should give you regular updates on how the process is going. Remember, while the Acas early conciliation process is free in itself, you will need to pay for legal representation. Just early conciliation representation and assessment of the claim usually costs around £1,000 + VAT.
What can be the outcome of early conciliation?
The early conciliation process can go on for up to six weeks, but if the conciliator finds that you and the employee are too far apart in your views to come to an agreement, they can end it early.
If you can’t agree on a settlement, then Acas will send an early conciliation certificate to both you and the employee. This confirms that the conciliation has taken place, but no agreement was reached. This then allows the employee to bring a claim to employment tribunal, when they will fill out a form called the ET1.
However, if you can reach an agreement, they will release a COT3 form. This is a legally binding document that details the terms of the agreement between both you and the employee and means that the employee can no longer bring a claim to employment tribunal about the matter.
Settlement agreements
You and the employee can propose settlement offers at any time during the process, but it’s most commonly done through Acas early conciliation. If early conciliation doesn’t result in a settlement, there’s no reason why either party can’t make further offers of settlement further down the line.
If you agree a settlement, you and the employee will need to contact the Acas conciliator you liaised with to formalise the agreement and set it out in a COT3 to ensure it’s legally binding.
How to respond to an employment tribunal claim
So you’ve tried early conciliation, or either party refused to engage, and now you’ve received an ET1 form. This means that the employee has notified the employment tribunal online that they wish to bring a claim. You should also receive a response form with the ET1, called an ET3. You have 28 days to complete this form and present it to the tribunal.
You’ll need to complete the form correctly to ensure that it doesn’t get rejected by the tribunal:
1. Complete the ET3
You must explain why you are defending the claim brought against you. You can do this on the ET3 form, but many employers decide to include a ‘grounds of resistance’ document alongside the form.
Make sure that the grounds of resistance document makes your version of events clear and accurately responds to the employee’s claim. You need to include key dates and evidence to support your arguments.
You should also make sure that you include reasons why the claim, or part of the claim, doesn’t have reasonable grounds or is outside of the employment tribunal’s jurisdiction.
Submit the ET3 within 28 days with all required information, including your organisation’s full name and address and whether you are defending any or all of the claim.
2. Acceptance or rejection
In most cases where employers have followed the protocol, your ET3 will be accepted. However, if you haven’t provided the required information or haven’t used the standard form, the tribunal can reject your ET3. They will state why it has been rejected, and what steps you can take next. This may include how to apply for an extension of time or for a reconsideration.
If your ET3 is accepted, employment tribunals will then usually send out an agenda that can be used as a checklist to prepare for the hearing.
3. Apply for an extension of time (if required)
If you need longer to respond to the employee’s claim, or your ET3 has been rejected, you can apply for an extension. You must do this in writing and state the reason why you need an extension, and whether you need a hearing. You must also copy in the employee.
The employee can submit written reasons why they oppose the application for a time extension to the tribunal within seven days of receiving their copy of the application. An employment judge can approve or deny an extension without a hearing.
What to expect at an employment tribunal
If early conciliation fails or either party refuses to engage in it, then the next step is the employment tribunal. There could be a preliminary hearing before a final hearing, and you may also be able to use judicial mediation.
Preliminary hearing
A preliminary hearing is an opportunity for a judge to understand the case and make the arrangements for a final hearing. It can take place on the phone, in person or via video call. They will usually confirm the issues surrounding the dispute and whether any party wants to amend their claim or response, then may go through some or all of the following matters:
- Whether there are any jurisdictional issues
- Whether there are any orders to be made
- Whether judicial mediation is suitable
- Whether expert advice is required (such as from a medical professional)
- Inspection of documents
- Provision of a schedule of loss and counter-schedule
- Exchange of witness statements
- Preparation for the final hearing
- Deciding which party will be responsible for the preparation of the hearing bundle
- Listing the case for final hearing
During the preliminary hearing, the judge will set deadlines called ‘directions’ for certain documents or tasks to be completed before the final hearing. These are usually around the hearing bundle and witness statements.
Hearing bundle
A hearing bundle contains all the documents and evidence relevant to each party’s case. You must disclose all relevant documents to the employee, and the employee must do the same for you. Usually, you will be responsible for producing the bundle as you, as the employer, will have access to most of the documents.
You and the employee must decide on what should be included in the final bundle. If you disagree on what should be included, two separate bundles can be prepared, but tribunals usually prefer you to have agreed on one hearing bundle.
You need to provide a copy of the hearing bundle for each member of the tribunal panel, one for the employee, one for the witness stand and one for you as the employer.
Witnesses
The judge will determine the date at which you need to exchange witness statements. It’s important to discuss who your witnesses should be and why their evidence is valid with your legal representatives. You should also find out whether there are any dates where your witnesses won’t be available to give evidence during the final hearing.
Once you’ve exchanged witness statements, you’re not usually allowed to change the evidence unless there is an exception reason why.
Judicial mediation
Judicial mediation is really a type of preliminary hearing where a judge will try to help resolve the dispute between you and the employee before it reaches a final hearing. It’s private and confidential, and if unsuccessful any discussions that take place can’t be used during the final hearing.
The judge will provide a view on the prospects of each party’s case to try to resolve it. If you can’t reach an agreement, you will have a different judge during the final hearing.
Not all cases are suitable for judicial mediation, and it’s not required to take part even if your case is deemed suitable. You can always continue to negotiate via Acas or your solicitors instead.
Final hearing
Once you’ve complied with the directions and the claim is prepared, it will progress to a final hearing. Usually, final hearings take place in person.
Both you and the employee, or their representatives, must attend the final hearing. You will have the opportunity to put forward your version of events to the judge and why your defence should succeed. Yours and the employee’s witnesses will give evidence and be cross-examined.
How long a final hearing lasts depends on the complexity of the case and the number of witnesses there are. Simple cases such as an unfair dismissal claim may last one or two days, while more complex cases could last five days or more.
Once you and the employee have given your evidence and put forward your arguments, the judge will make a decision on the outcome of the case. They may not always deliver the outcome in the hearing – it can be ‘reserved’. This means that the judge will send their decision to each party in writing.
If the employee is successful in their claim, the employment tribunal will consider the award that should be issued to them. This can be addressed in the hearing or during a remedy hearing which will only deal with the award.
Do employment tribunals favour employers?
Employment tribunals are intended to be impartial and fair. They shouldn’t favour either party and should only consider the evidence that is presented to them through each party’s forms and witness statements.
Most disputes between employers and employees don’t reach tribunal and are settled beforehand through Acas. In fact, about 69% of cases didn’t lead to employment tribunal in the latest available figure from Acas. The Ministry of Justice’s latest figures showed that 40% of the employment tribunals that went to a final hearing were dismissed, so no award was made to the claimant.
Average cost of employment tribunal to employer
Unlike in a civil court, the party that wins an employment tribunal case can’t seek its legal costs from the losing party. There are exceptional circumstances where costs can be ordered, but these are extremely rare.
However, legal advice will come at a cost and can be very expensive. While you’re not required to use a solicitor, it’s strongly recommended that you do so to ensure that you follow the processes correctly and give your organisation the best chance of defending your case successfully.
Legal costs for an entire employment tribunal process can range anywhere from £4,500 for a simple case to £30,000 + VAT for a complex case. If you lose an employment tribunal and you must make an award to the employee, it can run into the tens of thousands. For example, the average unfair dismissal award was £11,914, while the average disability discrimination award was £45,435 in the year 2022-23.
Both you and the employee should consider the cost of bringing a claim versus negotiating a settlement agreement at various points throughout the process.
Though it can feel like you want to argue your case in a hearing, it’s best to seek advice from your legal team. An employment tribunal, even if you win, can do serious damage to your brand’s reputation, so you should consider all options carefully.
The importance of tribunal insurance
As we’ve just shown, employment tribunal costs can get extremely expensive. There’s also been an increase in claims since tribunal fees for employees were abolished in 2017.
Employment tribunal insurance can help you manage this risk and keep your business financially secure should a claim be brought against you. It will cover your legal costs for the duration of the tribunal process, as well as any awards you need to honour afterwards. It should also cover any settlements you agree to pay to prevent the claim from going to a hearing.
We offer tribunal insurance to our clients in our retained HR packages, so you have peace of mind that any eventuality is covered.
How we can help
As well as offering tribunal insurance through our retained HR services, our consultant employment law solicitor can represent you in an employment tribunal. Book a consultation or call us on 0330 223 5253 to find out how we can work together to defend an employment tribunal claim.
Further reading:
