Employment tribunals: 22 FAQs

1. What's the framework for the way Employment Tribunals operate?
2. A former employee has decided to sue us for unfair dismissal. What is the procedure?
3. Is it worth fighting a claim, or should we just try and settle out of court? 
4. If we do settle out of court, is there any way of preventing the employee from coming back for a second bite of the cherry later?
5. An employee left, threatening to sue us, over four months ago. Since then we have heard nothing. Are we off the hook?
6. We have a trouble-maker suing us for discrimination. She hasn't a leg to stand on. How can we stop her in her tracks?
7. Is it worth fighting a case that we know we will lose, even though we had good reasons to sack the employee in question?
8. An employee who left without warning is bringing a case for constructive dismissal. Surely she should have given us the chance to set things right?
9. We sacked a man when he came in drunk. Now he is claiming unfair dismissal because we haven't followed correct procedures. Will he win?
10. Can I ask for an extension to the three-week time limit for replies to an ET1 form?
11. Can I ask for a postponement of the date for the hearing?
12. What kind of evidence do I need to assemble, for an Employment Tribunal?
13. Our ex-employee's lawyers have asked us for a lot of extra information. Do we have to provide it?
14. Are cases before Employment Tribunals held in open court? Are they likely to be reported in the press?
15. Will we be able to call witnesses? Will it improve our case if we do?
16. We are on the receiving end of a case alleging discrimination, in which two of the witnesses for the other side are claiming anonymity. Are they allowed to do that?
17. We have witness statements from all our witnesses. Do they have to appear in person too?
18. Do the witnesses get cross-examined?
19. How much is it going to cost to defend a claim for unfair dismissal based on a one-day hearing? If we win, can we claim costs back from our ex-employee?
20. What is the maximum settlement that an ex-employee suing us for unfair dismissal could conceivably get from the court? How will it be made up?
21. If the case goes against us, can we appeal? And is it sensible to do so?
22. If the Tribunal demands that we reinstate an employee we would not want on the premises again, what can we do about it?

1. What's the framework for the way Employment Tribunals operate?

The Employment Act 2008 came into force on 6 April 2009, following the Gibbons Review, a government-commissioned review looking at the whole question of employment dispute resolution.

The Gibbons Review said that, under the previous system, far too many disputes ended upf in front of Employment Tribunals; that it took far too long for them to get there; that the whole procedure was far too costly for employers (an estimated average of £9,000 per case defended); and that it was also far too stressful and damaging (in terms of future work prospects) for employees.

The new Act therefore:

• repealed the former statutory disciplinary and grievance procedures introduced in 2004
• created new powers for tribunals to adjust awards if there is unreasonable failure to comply with the relevant Acas Code of Practice
• extended powers for  Acas to conciliate in disputes
• simplified Tribunal claim and response forms, to eliminate unnecessary legalistic detail and encourage a succinct statement or estimate of loss
• removed time restrictions on Acas 's duty to offer conciliation to parties involved in employment tribunal claims
• promoted active and early case management
• provided for a (legally-qualified) chair to sit alone in some cases, rather than always have a panel deciding cases
• gave Tribunals appropriate powers to deal with weak cases or vexatious litigants

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2. A former employee has decided to sue us for unfair dismissal. What is the procedure?

The former employee will need to register his (or her) complaint at the Employment Tribunal on form ET1. Use of form ET1 is mandatory. The form requires a lot of information - such as name, address, grounds of complaint and whether the complainant wants reinstatement or compensation.

The previous requirement to state whether the employer's grievance procedure was invoked at least 28 days previously, as required under the minimum disciplinary and grievance procedures, is abolished, as employees can now go straight to the Tribunal without having to go through your grievance procedure. However, if they do not go through your procedure, and their failure to do so is unreasonable, they risk a reduction of up to 25 per cent in any award made to them (see Grievance Issues).

Assuming that your former employee's claim is not weeded out at this stage, you will be sent a copy of the ET1 form, 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 may issue a default judgement in favour of the complainant.

When you receive a copy of your employee's complaint, you will be contacted by Acas (the government-backed arbitration service), inviting you to take part in a conciliation process. The parties can resort to conciliation at any time up until the hearing - this is no longer time-limited as many cases used to be before April 2009.

If conciliation fails, 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.

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 for the other side. You can get a lawyer to present your case. Each side generally pays its own legal costs (although the Tribunal can award some costs against parties who have behaved unreasonably - see question 6).

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.

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3. Is it worth fighting a claim, or should we just try and settle out of court?

It makes sense to settle out of court if you can do so on reasonable terms. But you should certainly consider fighting if:

• The other party is plainly in the wrong, but cannot be brought to see it
• There are mitigating circumstances which are likely to have a big effect on any award you might have to pay
• You believe a settlement would send the wrong message to other employees, and give rise to more trouble in the future

Take legal advice.

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4. If we do settle out of court, is there any way of preventing the employee from coming back for a second bite of the cherry later?

Yes. If you reach a settlement through Acas (see question one) you can go for a legally binding agreement (known as a COT3 settlement), under which neither side will be able to come back for a second bite of the cherry.

Alternatively, you can aim for a 'compromise agreement', under which the employee waives his (or her) statutory employment rights in return for an agreed settlement on which he has received independent legal advice (normally paid for by the employer). Acceptance of such a settlement would make it impossible for the employee to come back for another go.

Compromise agreements have to be very carefully drafted, as various legal decisions on the effectiveness or scope of particular compromise agreements have gone against employers in the past, based on the precise wording used.

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5. An employee left, threatening to sue us, over four months ago. Since then we have heard nothing. Are we off the hook?

Unfair and constructive dismissal claims must be made within three months (three months less at least one day, or the claim will be barred) of the effective date of termination of employment (although there is provision to extend the deadline in certain circumstances). Claims are now being scrutinised much more rigorously, and it is unlikely that one that is out of time will be allowed to proceed.

But if you receive an ET1 form out of time in respect of your former employee, complete and return it, but clearly state as part of your defence that the claim is out of time. You should also ask for a preliminary hearing to determine the issue of its being out of time.

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.

There have recently been several Employment Appeals Tribunal (EAT) findings giving employees more leeway.

• Employment Tribunals have discretion to allow some discrimination cases to proceed, even if the grievance to which they relate is not submitted until after the initial three month time limit has expired.
• Where an employer completes investigations in relation to an internal appeal against dismissal just hours before expiry of the time-limit for bringing an unfair dismissal claim, it is likely the employee will succeed in showing it was not 'reasonably practicable' to bring their claim within the original three-month period, and an extension of the time limit will be granted.

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6. We have a trouble-maker suing us for discrimination. They haven't a leg to stand on. How can we stop them in their tracks?

Ask for a pre-hearing review. If your employee's case is as weak as you believe it to be, they will be advised that they has very little chance of winning. They may be asked for a sizeable deposit (the maximum deposit was increased from £150 to £500 in 2003), and they may also be warned that since they have no reasonable chance of success, they risk having substantial legal costs awarded against them.

Although in most cases going to an Employment Tribunal each party pays its own costs, where one party pursues a case which is misconceived or unreasonable, the Tribunal now has powers to award costs of up to £10,000 to the other side (see question 1).

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7. Is it worth fighting a case that we know we will lose, even though we had good reasons to sack the employee in question?

Probably, but take legal advice. If the Tribunal accepts that you had good reasons, it may reduce the size of the award against you. But you need to know whether your definition of a good reason is likely to coincide with that of the Tribunal, before you can make a decision on whether to fight or not.

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8. An employee who left without warning is bringing a case for constructive dismissal. Surely she should have given us the chance to set things right?

She is not obliged to raise her concerns under your grievance procedure before she can bring such a claim but, if she unreasonably fails to do so, she risks a reduction of up to 25 per cent in any award in her favour at a subsequent Employment Tribunal hearing.

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9. We sacked a man when he came in drunk. Now he is claiming unfair dismissal because we haven't followed correct procedures. Will he win?

He might. However, this could be one of those occasions when it will pay you to fight (see question seven), because even though you are technically in the wrong, the mitigating circumstances are so strong that the award, if any, will be negligible. It really depends on which procedures you failed to follow, and how drunk he was.

If you jumped to conclusions without much in the way of evidence, and sacked him on the spot without giving him a chance to put his case, you will be on shaky ground. You should follow a fair and reasonable disciplinary procedure before sacking people, even if the offence counts as gross misconduct and merits instant dismissal (see Disciplinary Issues). If you unreasonably fail to follow the relevant Acas Code of Practice you risk an increase of up to 25 per cent in any award made against you in subsequent Employment Tribunal proceedings.

But if you have half a dozen witnesses prepared to swear that he was drunk to the point of being dangerous, and you sent him home to sleep it off, gave him details of the offence in writing once he was sober enough to take them in, held a disciplinary hearing two or three days later, subsequently advised him of his rights of appeal, and merely infringed some minor internal procedures in dismissing him, you will be in a much stronger position. Provided that you have acted fairly and reasonably, the mere fact that you have not followed the strict letter of your own procedures will not necessarily invalidate your case.

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10. Can I ask for an extension to the three-week time limit for replies to an ET1 form?

There is nothing to prevent you from making such a request, but experience suggests that the Tribunal is unlikely to grant it. However, insufficient notice could be accepted as a valid reason. Time begins to run from your receipt of the ET1, not their issue of it. So if you can prove you received it late, your chances of an extension would be good.

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11. Can I ask for a postponement of the date for the hearing?

Yes. You will need to provide reasons and also alternative dates for listings for the forthcoming few months.

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12. What kind of evidence do I need to assemble, for an Employment Tribunal?

Anything that will help you to prove your case. This could be 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.

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13. Our ex-employee's lawyers have asked us for a lot of extra information. Do we have to provide it?

It depends on what it is. Both parties are entitled to ask for as much information as they feel to be necessary, and if one party fails to comply, 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.

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14. Are cases before Employment Tribunals held in open court? Are they likely to be reported in the press?

Yes, they are held in open court. As to whether they will be reported: that depends partly on how newsworthy they are, and partly on the other stories available on the day.

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15. Will we be able to call witnesses? Will it improve our case if we do?

Yes, you will be able to call witnesses, and providing they are relevant it will help your case. You can obtain witness orders to compel witnesses to come forward, if you need to do so.

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16. We are on the receiving end of a case alleging discrimination, in which two of the witnesses for the other side are claiming anonymity. Are they allowed to do that?

Yes, but as a case before the Employment Appeals Tribunal (EAT) made plain, it is up to the Tribunal to decide whether that anonymity can be preserved. The Tribunal must base its decision on the question of whether anonymity is necessary for a fair result, which will largely depend on what the evidence is, and in particular, how many other witnesses there are. Take legal advice.

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17. We have witness statements from all our witnesses. Do they have to appear in person too?

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.

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18. Do the witnesses get cross-examined?

Probably yes. Encourage your witnesses to be factual and polite. If you are cross-examined, follow the same procedure. Do not lose your temper - it will not help your case.

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19. How much is it going to cost to defend a claim for unfair dismissal based on a one-day hearing? If we win, can we claim costs back from our ex-employee?

Costs can vary considerably, depending on the type of case and how the individual pursues it, but in broad terms the bill for a one-day Tribunal hearing would probably be upwards of £4,000 plus VAT from start to finish. Tribunals do not usually award costs against a party, although they are now being encouraged to do so if there has been unreasonable conduct by that party.

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20. What is the maximum settlement that an ex-employee suing us for unfair dismissal could conceivably get from the court? How will it be made up?

The Tribunal might not make an award at all: it might simply demand that the employee be reinstated (to his or her old job) or re-engaged (in another of similar standing). However, if an award is made instead, it will currently consist of two elements:

• a basic award, which is calculated on age and length of service, up to a current maximum of £12,900
• a compensatory award, which is calculated on earnings lost (plus pension rights, reasonable expenses, etc), and which is (currently) capped at a maximum of £72,300

Although there were plans to abandon the use of age as a factor in determining the basic award when the new age discrimination legislation came into force (in October 2006), in fact those plans have been modified, and age is still used. Any employees below the age of 22 get half a week’s pay for each year’s service they have completed; those between the ages of 22 and 40 get a week’s pay for each year of completed service; and those aged 41 or over get a week and a half. In each case, the week’s pay is (currently) capped at £430, and there is a 20 week limit.

The compensatory award may be reduced if the Tribunal considers the employee to have been in part responsible for his (or her) 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 £5,300; and where employees have been sacked for whistle-blowing, or for pointing out health and safety flaws, there is no maximum on compensatory awards. There is also no upper limit on awards in discrimination cases.

An unreasonable failure to comply with the Acas Code of Practice means an Employment Tribunal can increase any award against you by up to 25 per cent (or reduce it by up to 25 per cent if the failure is by the employee). This is subject to the statutory cap – currently £72,300 - and a minimum basic award of four weeks’ pay, except in discrimination cases, where there is no statutory cap.

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21. If the case goes against us, can we appeal? And is it sensible to do so?

Yes, you can appeal. You have 42 days 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.

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22. If the Tribunal demands that we reinstate an employee we would not want on the premises again, what can we do about it?

This is unlikely, because the Tribunal will take into account whether it is practicable for the employee to return to work for the employer - and one of the factors considered will be whether relations at the workplace have been too severely damaged.

If it does happen, however, and you fail to comply with an order for reinstatement or re-engagement, it is open to the employee to complain again to the Tribunal, which will then make an order for compensation. This could include two elements: the compensation that would have been awarded in the normal manner, plus an additional award for the fact that you refused to comply with the original order - unless you can persuade the Tribunal that it was not practicable for you to do so.

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