On 6 April 2014 a new service, ‘Early Conciliation’, was introduced by Acas (the government-backed arbitration service) with the aim of helping employees and employers resolve disputes as early as possible, without resorting to a tribunal. Before lodging a tribunal claim an employee now has to notify Acas by filling in a simple online form. Acas will then contact the claimant to gather further information and the case will be passed on to a conciliator.
Anybody who wishes to lodge a claim with an employment tribunal will have to provide an Acas Early Conciliation Reference Number. A limited number of exemptions may apply, and the Employment Judge can decide whether they are relevant.
If one of your employees has started the Early Conciliation process, you will be contacted by Acas inviting you to take part in the process.
If conciliation fails, and your employee lodges a complaint with a Tribunal, you will be sent a date for the hearing, which may be as little as 14 days ahead. If you fail to turn up, for whatever reason, the Tribunal is likely to find against you. Both parties can resort to conciliation at any time up until the hearing – cases are not time-limited.
If you reach agreement, enter into a legally binding agreement (known as a COT3 settlement) under which neither of you can come back for a second bite of the cherry.
Employment Tribunal claims must be made within three months of the date of termination of employment or of the event that is the basis for the claim, or the claim will be barred.
The Employment Tribunal has the discretion to extend time if the employee can show that it was not reasonably practicable to present the claim within the three-month period or, in some discrimination cases, if it is ‘just and equitable’ to do so.
If employees unreasonably fail to follow the provisions of the relevant Acas Code of Practice on grievances, the Employment Tribunal has a discretion to reduce any compensatory award by up to 25%.
Your former employee must register their complaint at the Employment Tribunal on form ET1, stating their name, address, grounds of complaint, whether they want reinstatement or compensation, and other matters. Employees can either apply online or fill in a claim form and send it through the post.
You will be sent a copy of the ET1, and must respond on form ET3 within 28 days, setting out the case that you will be putting to the Tribunal. If you fail to respond, the Tribunal can go ahead and decide in favour of your employee.
If your employee is out of time, clearly state this in your defence. You should also ask for a preliminary hearing to determine the issue of its being out of time.
If you believe your employee’s case is too weak to succeed, ask the Tribunal for a pre-hearing review. The Tribunal can ask your employee for a deposit of up to £500, and they may be warned that they risk having substantial legal costs awarded against them if they persist – although each party pays their own costs in most Employment Tribunal cases, the Tribunal has powers to order a party that pursues a misconceived or unreasonable case to pay costs of up to £10,000 to the other side.
It makes sense to settle out of court if you can do so on reasonable terms. But you should certainly consider fighting if:
If you can agree terms, enter into a ‘compromise agreement’ under which the employee waives their statutory employment rights in return for the agreed settlement. Make sure your employee has received independent legal advice (normally paid for by you). Acceptance of such a settlement would make it impossible for them to come back for another go at you.
Tribunal procedures are less formal than those in the courts, but you may want to call witnesses to back up your claims, and you may want to cross-examine witnesses appearing for the other side. You can get a lawyer to present your case.
You need to gather evidence, such as employment contracts, the staff handbook (if any), details of your discipline and grievance procedures (if any), and any other correspondence or documents which are relevant to the issues. These might include witness statements, but you will probably also need to ask witnesses to attend. Tribunal members will want to hear your witnesses for themselves, and may want to question them.
Both parties are entitled to ask for as much information from the other as they feel to be necessary. If either of you fails to provide it, the other side can write to the Tribunal and ask them to get it. If you feel that the information the other side is requesting is not relevant, write to the Tribunal and say so.
You will be notified of a hearing date. If you can’t make it, provide reasons and also alternative dates for listings for the forthcoming few months.
Hearings are open to the public – they can be reported in the press if they are newsworthy.
It is always best to call witnesses to give evidence in person as more weight is attached to evidence where the witness can be cross-examined. You can submit witness statements without asking the witnesses to give evidence but it will not carry as much weight as calling them.
You can apply to the Tribunal for witness orders to compel witnesses to come forward, if you need to do so.
The Tribunal’s decision is usually announced at the end of the case, or a few days later. Both sides are sent a written version, giving the reasons. If you do not like the decision you may be able to appeal to the Employment Appeals Tribunal.
Costs can vary considerably, depending on the type of case and how the individual pursues it, but in broad terms the legal bill for a one-day Tribunal hearing would probably be in the region of £4,000 plus VAT from start to finish.
Tribunals do not usually ask either party to pay, or contribute to, the other’s legal costs, although they are now being encouraged to do so if there has been unreasonable conduct by that party.
If the employee is claiming unfair dismissal, the Tribunal might not make an award at all: it might simply demand that the employee be reinstated (to their old job) or re-engaged (to another job of similar standing). However, if an award is made, it is made up of two elements:
The compensatory award may be reduced if the Tribunal considers the employee to have contributed to their own misfortunes.
Where employees have been sacked for trade union activity, or for acting in health and safety matters, or otherwise as an employee representative, there is a minimum basic award of £5,676; and where employees have been sacked for whistle-blowing, or for pointing out health and safety flaws, there is no maximum on compensatory awards.
Under the discipline and grievance laws, if the employer unreasonably fails to follow the provisions of the relevant Acas Code of Practice, the employee’s compensation may be increased by up to 25%. Conversely, where the employee unreasonably fails to follow it, their compensation can be reduced by up to 25%.
There are no upper limits on awards in discrimination cases. An employee who wins on a discrimination claim might also be entitled to compensation for injury to feelings.
Employees subjected to discrimination can also bring claims against individuals, which could include you and/or your managers.
If employees have been dismissed wrongfully (usually because they have not been given the notice to which they are entitled under the terms of their employment), they can claim damages from you to put them in the position they would have been if the breach had not occurred. Usually, this means a sum equal to salary and any benefits payable during the notice period.
However, Employment Tribunal awards for wrongful dismissal are subject to an upper limit of £25,000.
If you disagree with the Employment Tribunal’s decision, you have 42 days to appeal, from the date the notification of the decision is sent to you. It is the date of despatch of the notice, not receipt, that is important. The appeal is limited to points of law. Take legal advice before lodging any appeal.