Where an employee had been dismissed on the ground of medical incapacity while his contractual...
Handling employment tribunal claims
- Claim threatened
- Early conciliation
- Receiving a tribunal claim
- Responding to a tribunal claim
- Case management and Preliminary Hearings
- Discrimination questions
- The hearing
- The decision
- The guide below provides overview of the course of a typical claim in an employment tribunal.
- Many employers will face an employment tribunal claim at some stage during the course of their business. Employment tribunals adjudicate on disputes that arise between employers and employees. They are designed to be less formal than other courts. They are governed by their own procedures and there are no formal rules of evidence.
- It is possible for parties to represent themselves in the employment tribunal, but legal advice and representation is almost always useful and beneficial.
- Naturally, one size does not fit all and this guidance should not be used as a substitute for specific legal advice. This information is directly relevant for tribunal proceedings in Great Britain, although there are some differences in the language and the way the tribunals deal with claims and witness statements (for example) in Scotland. Legal advice should be sought in such cases.
- Between 2013 and summer 2017, users of the employment tribunal system had to pay fees in order to bring a claim, although a remission was available in specific circumstances. The courts have since confirmed that no fees should be levied. Guidance is awaited regarding repayment of fees paid by claimants during that timeframe and situations where claims were not pursued or were struck out due to non-payment of fees. Legal advice should be sought if this applies to any claims threatened or brought against your business.
- In the tribunal system the employee is referred to as the ‘claimant’ and the person against whom the claim is made (usually the employer, although sometimes individual employees can be named as well) is referred to as the ‘respondent’. In this guide we usually refer to them as ‘employee’ and ‘employer’.
- Employers may be able to use the following to dissuade individuals from bringing a claim, if one is threatened:
- Typically a lengthy period will pass between a claim being submitted and the formal hearing before the tribunal. For a one-day unfair dismissal claim, the shortest period may well be four months but longer is not atypical. Lengthier and more complex claims may take in excess of 10 months to get to hearing. During this time, the employee is expected to 'mitigate their losses' by looking for alternative work, and will be expected to show evidence of these attempts and/or any new employment
- Furthermore, individuals who intend to bring a claim in the tribunal will only be permitted to submit the actual claim form to the tribunal after ACAS issues what is known as an ‘Early Conciliation Certificate’, see further below.
Risk of rejection
- Claims can be dismissed by the tribunal upon receipt if any relevant information is missing, or subsequently by the judge during the ’initial sift’ stage if the tribunal does not have jurisdiction to hear some or all of the claim legally, and/or it has no reasonable prospect of success.
- Individuals must go through early conciliation and be issued with an ‘Early Conciliation Certificate’ before they can submit a claim to the tribunal. Failure to do so means the tribunal will not allow them to proceed with a claim. The process is offered by ACAS as a way of helping parties resolve disputes before the individual brings a claim. In essence, any individual must notify ACAS either by telephone or on line of their intention to bring a claim in relevant proceedings against their employer.
- Once ACAS have received notification they will contact the employee and ask for their consent to contact the employer and attempt to resolve the dispute. Although the ACAS officer will try to promote conciliation, there is no obligation for the employee to give that consent
- If the individual consents to their involvement, ACAS will attempt to contact the employer.
- But if the consent is not given or ACAS cannot contact either of the parties, they will conclude that conciliation is not possible and will issue the Early Conciliation Certificate to the employee allowing them to proceed with the claim.
- It should be noted that in the latter circumstances, the employer will not have any indication from the employee or ACAS that a claim might be made against them as ACAS will not notify the employer without the employee’s consent and will not issue a copy of the certificate to the employer.
- If both parties are willing to attempt conciliation, they will have one calendar month to try and conciliate. This period can be extended by up to 14 days with the consent of both parties and if settlement is deemed by ACAS to be realistic. During the period of attempted conciliation the employee’s three-month deadline to submit their tribunal claim is suspended.
- It is important that the opportunity to conciliate is not ignored or missed as it could potentially save the employer a lot of time and money if they are able to settle the matter quickly rather than having to defend a claim. Even if settlement is not possible through early conciliation, the parties may be able to continue the discussions and seek settlement before the hearing.
- Conciliation through ACAS is free.
- Employers should ensure that managers who might receive the initial contact from ACAS are trained to deal with the issues or know who to refer the matter to as quickly as possible. It is also important that the matter be kept confidential, as in certain circumstances the employee may still be working for the business.
- A COT 3 is produced by ACAS when the parties successfully resolve the issues. Although a paper version is signed by the employer and employee, the terms are binding as soon as the parties tell ACAS they are agreed. See below for more details.
RECEIVING A TRIBUNAL CLAIM
- Since the introduction of early conciliation employers are more likely to know the individual’s key allegations before formal proceedings start. However, if the employee had told ACAS that they don't want to engage in the early conciliation process with their employer, claims may still continue to arrive without any notice at all.
- The key steps after you receive a claim are to consider:
- Is your business the correct respondent?
- Is your business correctly identified on the early conciliation certificate?
- Does the employee have the right legally to bring this claim? For example, is he or she a self-employer contractor but the claim requires them to have been your employee?
- Does the employee have sufficient service to bring this type of claim?
- Is the claim in time? For unfair dismissal claims, the claim should be submitted within 3 months less one day from the date of termination. Generally, a tribunal will not allow out-of-time claims to proceed unless there is a very good excuse for not presenting the claim in time, such as illness or injury. If it is a discrimination claim then the tribunal does have a wider discretion to allow out-of-time claims. The tribunal is expected already to have identified whether a claim has been submitted late before sending a copy to the employer but this is not guaranteed and/or the facts of the case may mean the question of time limits is complicated. This question will also be complicated by the early conciliation regime as the 3-month time limit is temporarily suspended during the period of conciliation. As a result of this, claims might not be processed by the tribunal and sent to employers for several months from the date of any act that forms the subject of the claim.
- If it is a TUPE-related claim, there are a number of points to consider. For example, was it a genuine TUPE situation? Are you the correct respondent? Did you obtain or give contractual indemnities to the other business involved in the transfer regarding such employment-related claims? Do you want to ask the tribunal to join in the other business?
- You will be given 28 days from the date of the tribunal’s letter to respond to the claim by submitting your grounds of response (the ET3). This must be submitted on the proper form which can be found on the Employment Tribunals website. Make a diary note immediately. Will you be able to meet this deadline, or do you need to ask for an extension of time?
- What information do you need from internal parties to prepare the response?
- Which employees are important? Have any of them left, and if so, are they willing or contractually bound to assist the business with this litigation?
- Are any other respondents named with whom you need to liaise? These may be external parties and/or in discrimination cases, named individuals employed or previously employed by you. Will you be submitting a response on behalf of those other named respondents? Sometimes there might be a conflict of interest.
- Have these allegations already been settled through ACAS or a settlement agreement?
- If the employee has brought a contract claim against you, do you have any contract claim (a counter-claim) against him or her which needs to be included in the ET3?.
- Is it appropriate to issue a costs warning letter (either now or after the response is issued)? They should not automatically be sent for every case.
- Remember that any correspondence to the tribunal during the proceedings should be copied to the employee or his/her representative. Always try and agree preliminary matters such as agreeing a list of issues which the tribunal needs to consider at the hearing with the employee or their representative directly. If you cannot and you need the help of the tribunal, you must copy your letter to the employee and tell them they should inform the tribunal of any objections they have to the application as soon as is possible.
- Never automatically copy your correspondence with the employee to the tribunal. Only write to it if you need something and always identify yourself in the first line as the respondent.
RESPONDING TO A TRIBUNAL CLAIM
- You must submit a response on Form ET3 by the date given on the tribunal documentation, which will be 28 days from the date that the ET1 is sent out by the tribunal.
- The ET3 sets out your response to the claim. The new Form ET3 must be used (this can be downloaded free of charge from the internet). It must contain all the required information or it may not be accepted.
- Keep your response concise and where possible, deal with events in a chronological order. It is not a witness statement and does not need to be very long.
- Make sure you refer to all relevant documents in the ET3 because the tribunal can, if its wishes, ask for copies of letters etc. when deciding whether to permit your response (and/or counterclaim if appropriate).
- Do not set out the legal provisions in detail unless you feel comfortable doing so: it is enough to simply say whether you reject all or some of the allegations made.
- Bear in mind the following practical points:
- It is not possible to save the form, once completed, to your computer before submitting it. Print off a copy and save it
- There is a 20-minute deadline in which to complete each page of the form. Bear in mind that you only have 20 minutes in which to fill out each section, and 150 lines for your actual response wording.
- It’s a good idea to save a copy of the ET3 to your computer, type into that version, and then email that version to the tribunal. Whilst it is not possible to file a claim in this way, it is possible to file a defence by emailing the tribunal directly.
Extension of time request
- If it is not possible to submit the ET3 within the 28-day timeframe, you should write to the tribunal within that period and ask for an extension of time, copied to the employee.
- You will have to explain why you are unable to submit the ET3 in time, for example, the person who dismissed the employee is on holiday and you need information from them.
- If the time limit has already expired, you should write and ask for an extension and include the draft ET3.
- When making such an application, you should confirm that the allegations are all denied.
- The employee can object to your application to extend time and it is not guaranteed that the tribunal will agree your application, so it is always best to submit it in time where possible or you risk not being able to defend the claim.
Failure to respond at all
- A failure to respond within the deadline (or to obtain an extension of time in which to respond) can lead to you having a default judgment made against you and you may be debarred from taking part in the claim.
Rejection at initial sift
- The tribunal may reject the response at the initial sift phase, for example because the ET3 was on the wrong form or did not have the employer’s full name.
- If this happens, you can apply for reconsideration of that decision. This must be requested within 14 days of the date of the notice of rejection and can only be on the grounds that (a) the decision was wrong, or (b) the notified defect was rectified.
Rejection at initial consideration stage
- The tribunal may dismiss the ET3 if it believes it has no reasonable prospect of success.
- The parties will be informed in writing of this decision and can submit written reasons appealing that decision within a specified time period.
- The tribunal may accept them and the claim proceeds as set out below, or alternatively, you can ask for a hearing to decide whether the response (or part of it) can proceed.
CASE MANAGEMENT AND PRELIMINARY HEARINGS
- Not all claims are treated in the same way. Sometimes the tribunal will send out an order setting out the dates by which the parties need to take certain steps. In other cases, it will convene a Preliminary Hearing. This replaced the previous Case Management Discussions and Pre-Hearing Review.
- Both parties are required to attend the Preliminary Hearing which ordinarily will be conducted by a judge alone. It is used to agree what steps should be taken to prepare the case for a hearing and/or key issues. They may take place by telephone.
- If preliminary issues may be decided at the Preliminary Hearing, the tribunal will inform the parties what the issues are at least 14 days in advance.
- A typical case might then include some or all of the following stages:
An order for further particulars
- If either the ET1 or the ET3 is ambiguous, the other party can ask that party for Further Particulars. In other words, they can put formal questions to the other party about the exact content of the Claim or Response.
- The other party should reply in writing. If they do not comply then you can ask the tribunal to issue an order.
An order for disclosure of documents
- Both parties must disclose to the other party copies of any documents which are in their possession or control and which are relevant to the issues in dispute. This means that they have to make a reasonable search for relevant documents.
- The time and resources put into a document search should be proportionate to the issues raised by the claim. Clearly documents should not be destroyed or withheld even if they do not support that party’s case.
- ‘Privileged’ documents (including correspondence with solicitors for the purpose of taking legal advice about the case and genuine settlement negotiations with the other side) do not have to be disclosed.
- Disclosure is done by each party preparing a list of relevant documents and giving it the other side. Copies (or inspection) of documents may then be requested.
- If no disclosure date is set by the tribunal, the parties should try to agree a date to exchange lists of their relevant documents no less than 6 weeks before the hearing date and 4 weeks before the exchange of statements.
An order for documents to be brought or a witness to attend
- The tribunal can, either at its own instigation or at the request of a party, order specific disclosure and/or for witnesses who are based in Great Britain to attend a hearing.
- In some cases an expert opinion may be required (e.g. from a medical expert on the health of the employee).
- In such cases, the tribunal can order the parties either jointly to instruct an expert or that they may instruct separate experts to prepare a report for use at the hearing.
Exchange of witness statements
- Shortly before the final hearing, both parties will be required to exchange witness statements. A witness statement is a document setting out one individual person’s evidence relevant to the case. This will form the basis of the evidence that that person will give at the tribunal hearing.
- When parties exchange statements, they do so simultaneously so that each party gets to see what the other party’s witnesses will say in advance of the hearing.
- Where a party believes that a person has relevant witness evidence but that person refuses to attend the hearing, the party may apply for a witness order requiring that person to attend but it must be remembered that they are unable to cross examine their own witness and so must be very sure about what they are going to say in advance. For this reason this is used very little.
Schedule of loss
- Where the employee is claiming compensation, he or she will often be required to prepare a schedule of loss. This is a document setting out the calculations of the losses that he or she is claiming (e.g. the lost salary for the period of time for which he was out of work.
- If you disagree with this, you should do a counter schedule.
- The tribunal can order a party whose case has little prospect of success to pay a deposit in order to continue with their claim. Currently, deposit orders of up to £1,000 can be ordered.
Provision of availability dates to fix the date for the main hearing
- Parties should provide to the tribunal all dates on which they or their witnesses will be unavailable, as once a hearing date is fixed, there is no obligation on the tribunal to grant an application to postpone it.
Preparation of the hearing bundle
- One party will usually take responsibility for preparing the bundle. This is a file of documents in chronological order which contains all the key documents required for the hearing.
- This will include not just the pleadings (ET1 and ET3) but also any relevant documents on which either party wishes to rely. Care should be taken only to include relevant documents, so a one-page extract from a policy rather than the whole handbook.
- These are brought to the tribunal on the day (although some tribunals require them in advance).
- Whoever is responsible for bringing them should ensure sufficient copies are prepared so that the tribunal panel and the witness stand all have an identical bundle.
- Always bring a spare for accidents or for anyone attending the tribunal as an observer/press to read as it is a public hearing (unless an order is made to the contrary, which can happen in limited circumstances).
- Where an employee alleges that you have discriminated against them on a number of specified grounds (e.g. sex, race, disability, etc.), he or she may serve on you a formal questionnaire. This is a way for the employee to ask questions and gather information from you to clarify their claims and support their case.
- Until April 2014 these questionnaires were subject to statutory regulation with strict deadlines for the employee to serve the document and for employers to respond. This statutory scheme has been replaced by ACAS guidance which although not legally binding, will be taken into consideration by the tribunal if appropriate. The questionnaire and any response are now voluntary and must be dealt with in a reasonable manner by the parties.
- The questionnaire may be served at any time, ideally before a tribunal claim is submitted.
- You are not obliged to reply. However, if you fail to reply within the appropriate time scale given on the questionnaire, or reply evasively, the tribunal may draw an inference of discrimination.
- Questionnaires are often used tactically by employees to put pressure on employers, but they can also be used to clarify the claims and resolve the issues in dispute.
- Various applications can be made during the course of tribunal proceedings, or at their end, including:
- application for a review (i.e. reconsideration) of a default judgement
- application to dismiss following withdrawal/settlement
- application for a counterclaim (which would be made by you only)
- application for a review of the final decision
- application for judicial mediation (fee of £600 which is payable by you)
- Your application must be copied to the claimant so that they can object to it. Legal advice should be sought if you wish to make such an application.
- Tribunal claims are open hearings so members of the public can attend if they wish.
- Many claims such as unfair dismissal will be heard before a judge sitting alone. In other cases, the evidence will be considered by a panel made up of two lay members and one judge. The lay members come from different backgrounds – one is from an employer’s organisation background, and the other from an employees’ organisation background (e.g. a trade union).
- Witness statements are now taken as ‘read’, which means they do not have to be read out and the tribunal reads them to itself. Witnesses should be ready to be cross-examined straight away.
- The tribunal can limit the length of time a party has to cross-examine witnesses and/or make submissions. Any such limitations should be strictly adhered to.
- There are usually two parts to a hearing – liability (i.e. whether the employee has won or lost) and remedy (if they have won, how much compensation they should receive or what other remedy would be appropriate). Sometimes the tribunal will deal with the issue of remedy at a later date.
- It is common for tribunals not to give their decisions on the day of the hearing but to ‘reserve’ the decision. This means that the decision will be written up and sent to the parties by post. The tribunal is obliged to set out the findings of fact, the appropriate law and an application of law to the facts. If a decision is given orally at a hearing then any subsequent judgment will be very short and does not need to include reasons. If you wish to see the reasons for the decision, this should be requested within 14 days of the date of the decision notice.
- Once the written reasons for the tribunal’s decision are sent to the parties, the party who lost has 14 days to ask the tribunal to review its decision and 42 days to appeal.
- The grounds on which a tribunal can either decide itself or be asked to review its decision are not as limited as they were under the old rules and are now ‘where it is necessary in the interests of justice’. However, this does not mean you have a second bite at the cherry. It covers situations where, for example, new information has come to light which would have affected the outcome.
- Appeals are only allowed on points of law or perversity (i.e. no reasonable tribunal could have reached that conclusion on its facts) – it is not sufficient that one party disagrees with the outcome. Appeals are made to the Employment Appeal Tribunal (EAT).
- Fees are payable if applying for a review and/or an appeal.
- The tribunal can make a declaration and/or a recommendation in discrimination cases, for example, that all employees are provided with equal opportunity training.
- Costs awards in the tribunals are not automatically awarded against the losing party, which means that even if you lose, you are unlikely to have to pay the other side’s costs or to get them to pay yours. This makes low-value claims ripe for settlement on an economic basis, as the cost of defending or bringing them often outweighs the likely compensation. However, costs awards can be made in some situations.
- Employers who have succeeded in defending their case can bring the tribunal’s attention to any costs warning letters they issued to the employee. This will not guarantee costs being awarded but may help the tribunal in the exercise of their discretion.
- If you paid a fee in respect of an application you made and were successful in doing so, the tribunal has the discretion to make a costs order against the employee requiring them to pay that fee.
- Both parties may attempt to settle any claims the individual may have before they inform ACAS of their intention to submit a claim or have submitted a formal claim.
- Discussions about settlement are most commonly held on a ‘without prejudice’ basis. If the individual is an employee at the time and there is no dispute at the time between the parties, they may instead have a ‘protected discussion’:
- A ‘without prejudice’ discussion is a genuine settlement talk which is off the record and cannot be mentioned in front of the tribunal. Strictly speaking, such discussions will only be genuinely ‘without prejudice’ if they are an attempt by the parties to resolve a genuine existing dispute between them.
- A ‘protected discussions’ relates to discussions between the parties where no dispute exists about settlement. They are off the record and cannot be mentioned in front of the tribunal unless certain circumstances apply for example, if the individual alleges the subsequent dismissal was discriminatory or because they ‘blew the whistle’.
- If the parties can agree a settlement at any point, whether that is before the employment ends or during the course of a tribunal claim, they will normally enter into a ‘settlement agreement’.
- If the settlement has been agreed as part of the early conciliation discussions or through ACAS during the course of the tribunal proceedings, the parties will usually enter into a COT3 agreement formalised by ACAS.
- A COT3 agreement is typically much shorter and simplistic in format than a settlement agreement, but will still ensure that the individual waives their right to pursue the particular claim(s) alleged and any other employment-related claims they may have at the time.
- Unlike civil claims, the parties do not risk costs if they have not mediated. There is a fee payable for mediation.
- If the parties have been unable to settle the allegations via the early conciliation service, ACAS continues to provide a conciliation service once a claim has been issued in the tribunal which assists many parties in finding a settlement
- Alternatively, the parties can agree a settlement agreement without the use of ACAS, although in order to be valid certain criteria must be satisfied, such as the individual must take independent legal advice.
- Terms of settlement frequently involve the withdrawal of the claim from the tribunal, waiver of all claims and/or any subject access requests by the employee and an agreement that both parties will keep the terms of the settlement confidential.