Guidance for employers: navigating Employment Tribunal claims

Receiving an Employment Tribunal (ET) claim can be a daunting experience for any employer, whether you lead the HR function of a multinational company or are the sole director of a family-owned business. At the crux of most ET claims is an individual (usually an ex-employee) who feels wronged and is looking for some form of justice (often financial compensation). This article aims to de-mystify the ET process and clarify some of the commonly used jargon and challenges that employers encounter when faced with a claim.

What claims can be brought in the ET?

The ET is the specialised judicial body which handles disputes between employers and employees. As such, most employment-related claims should be brought in the ET. Employees can bring claims for issues related to breach of employment contract, unfair dismissal, whistleblowing detriment, discrimination, and failure to consult over proposed collective redundancies etc. Additionally, certain groups, like trade union members, have specific claims they can bring.

Not all employment-related claims need to be brought in the ET. Some are better addressed by the civil courts, including breach of contract claims worth over £25,000 or matters involving the enforcement of restrictive covenants.

It’s all about timing

For most ET claims to be considered “in time”, a claim must be lodged within three months of the last act or failure to act complained of. For example, depending on the type of claim, this could be an act of discrimination or the date of dismissal.

To initiate an ET claim, an employee typically needs to go through the ACAS early conciliation process. If early conciliation applies to their claim, the time limit for lodging the claim can be extended to take the early conciliation period into consideration.

Respondents can use ACAS as a tool to try and understand the motivation behind the claim and what remedies (including financial compensation) the claimant is looking for. ACAS can be used to resolve a dispute privately before it reaches the ET.

Responding to the claim

Once a claim is received by the respondent, they normally have 28 days to respond. The claim, if drafted well, can reveal a lot about a claimant’s claim, including:

• What legal claims and key issues are they pursuing,
• What compensation or remedy they are looking for,
• Who they have identified as relevant individuals, and
• The “key events” for which it might be helpful to have witness evidence.
  
  

Respondents will need to respond using an ET3 form and can prepare a “Grounds of Resistance” as an accompanying narrative. The claim and response together are called the “pleadings”.

A strong defence starts at the response phase. There may be inaccuracies in the claimant’s claim which can be refuted in a response, rather than waiting until the final hearing. At the “pleadings” stage, the parties can identify points for concession but also irreconcilable issues which will continue to be an ongoing source of contention during the litigation.

Once in receipt or on notice of a claim, employers are under a duty to disclose all relevant documents which are in its possession or control, regardless of whether they help the party’s case (a process known as “disclosure”). This includes a duty to preserve any relevant documents, meaning employers will need to ensure that routine document deletion cycles are suspended, and that key staff are not deleting documents that are relevant to the case.

The response is in, now what?

After receiving the response, a judge will consider the pleadings to determine the “case management directions” needed to manage the progress of the case. These are procedural steps that the parties will need to follow within a set timeframe to ensure the case proceeds efficiently. The usual case management steps in a claim include disclosure, witness statement exchange, and a final hearing.

In most cases, a preliminary hearing (PH) will be held to issue case management directions to the parties. The hearing is an opportunity to determine a preliminary issue, consider applications for specific orders, explore the possibility of alternative dispute resolution (see below) and set a roadmap for the litigation.

Judges will consider multiple factors before deciding next steps, such as:

• How many witnesses does each side plan to call? This will dictate the length of the final hearing.
• Are there other preliminary issues that need to be considered before a final hearing?
• How sensitive is the subject matter of the case? Are anonymity orders or reporting restrictions required?
• Is there expected to be a lot of disclosure (a time-heavy exercise)?
  
  

From a practical perspective, it is helpful to be prepared with your availability over the next 12-18 months if the judge decides to list a final hearing during the PH.

The final hearing will be an opportunity for both parties to present witness evidence and make submissions about the relevant legal claims. It will be heard by a legally trained judge, who in more complex cases will be accompanied by two wing members: individuals without legal experience, but with backgrounds representing both employees (such as trade union representatives) and employers (such as HR professionals).

Do we need to litigate?

At any stage, either party may want to assess whether there is merit in looking at alternative ways to solve the dispute. Tribunals (and courts in general) encourage parties to resolve disputes without going to hearing as it saves all parties time, resources, and in some cases, the emotional and administrative burden of dealing with a claim.

For employers, it is important to remember that ET proceedings are public hearings. If the claim is potentially reputationally damaging, resolving the dispute through without prejudice offers or mediation may be a more commercially appropriate approach.

Judges can also support parties in finding common ground through Alternative Dispute Resolution (ADR) (for more information, see here), including:

• Judicial assessment (see here), or
• Judicial mediation: where a judge acts as a mediator for the parties, which can be helpful when a party is unrepresented.
  
  

How powerful is the ET’s magic wand?

The remedies available in the ET are dictated by the legislation underpinning the claim. For example, in unfair dismissal cases, employers may be ordered to pay both a basic award and compensatory award. Both awards are calculated based on strict statutory formulas.

Tribunals may order (upon the claimant’s request) reinstatement into the employee’s former job or re-engagement in another comparable role within the organisation with equivalent status. These remedies require a viable relationship of trust and confidence between the employee and employer.

For discrimination cases, the ET may additionally award compensation for injury to feelings, make a declaration as to the rights of the claimant and/or respondent, or make recommendations to the employer aimed at addressing and remedying the discrimination found.

Potential silver lining?

Whether your organisation is being threatened with litigation, currently defending a claim, or has successfully resolved a dispute, there are lessons to be learned from litigation.

The truth is employers will never be able to safeguard their organisation against every claim. However, maintaining updated policies, robust HR practices, and keeping up with employment law updates (see here) can help.

Claims can also be catalysts to reflect on organisational practices and to take a temperature check of organisational culture. Are practices fair? Is the working environment supportive of inclusivity and diversity? Are adequate records of decision-making being kept? Taking stock of these questions can help to prevent claims and foster a more open and collaborative working environment.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, August 2024