A Guide to the Employment Tribunal Process
We look at how small business owners can avoid and successfully contest claims of unfair dismissal, breach of contract and discrimination
It is a sad fact of business life that disputes between employees and employers are common. The majority of these disputes will play out at an employment tribunal.
Even if you consider your relationship with your employees to be a harmonious one, and consider the likelihood of disputes to be low, it still pays to have a considered strategy for dealing with tribunals. Employment law is increasingly developing in favour of the needs of employees and with awards increasing, being unprepared for tribunals can see you losing out massively.
A well-thought out plan will allow you to prepare and present the best possible defence of your actions, and prevent disgruntled employees from taking you to the cleaners.
Here we cover the stages of the tribunal process, how to defend a case and prevent a dispute arising in the first place.
How are employee tribunal hearings judged?
Commonly, there are three adjudicators present at tribunal hearings. This includes an employment judge who is qualified in employment law and a lay member nominated by an employers’ organisation and one nominated by a union/employees’ body.
The tribunal process is impartial. However, unfair dismissal cases usually begin with the assumption that the employer has a case to answer, and decisions largely follow the statute law (employers that have not followed fair/transparent disciplinary procedures enshrined in the law can end up paying 25% more in awards), the Acas code of practice and are made by majority vote.
Tribunals take reasonable circumstances into account – like allowances for common difficulties in small businesses, and in your specific industry – and awards are intended to compensate the employee. They are not punishments for the employer.
How does the tribunal process begin?
Most tribunal hearings come about as a result of the same process whereby the employee/claimant submits an ET1 form, explaining their complaint and state whether statutory dispute resolution procedures were followed.
Then you (the employer) submits an ET3 form in response. In this, you outline the case you will put to the tribunal. This must be sent within 28 days, or you risk losing your right to defend yourself, though extensions may be granted.
A hearing date is set and a copy of the papers is sent to Acas, which aims to settle claims out of court – over half of employee complaints are resolved before a hearing takes place.
How can I go about pursuing/reaching a settlement with the claimant?
It is often much less risky, time-consuming and potentially costly to reach a settlement with the claimant than let the case go to a tribunal.
Settlements usually include a cash sum, which is negotiated between the claimant and business owner. Settlements may include a reference, which are also negotiated between the claimant and yourself – they do not have to include anything but a confirmation of the dates of employment. And they may also include a confidentiality clause. This cannot be obtained through a tribunal, and may limit the damage to your reputation.
Settlements are usually reached by one of two routes, a ‘settlement sgreement’ or a COT3 settlement. With a settlement agreement, employees agree to waive their employment rights in return for a pre-agreed settlement; whereas a COT£ settlement is a resolution brought about through Acas. Both settlements are legally binding.
How should business owners prepare for the hearing?
Preparing for the hearing is of paramount importance – how you conduct yourself in the preparation stage will have the greatest bearing on the outcome of the hearing. There are several steps you should follow to increase your chances of a favourable outcome.
Start by checking for technical flaws, like if the employee has less than two years’ service they are not eligible to make an unfair dismissal case. Also check if an amicable resolution or settlement can be reached. Many disputes can be resolved without the need for a tribunal if the parties involved are willing to negotiate – see above.
Consider the possible costs of a hearing (they can be a huge strain on time and money resources) and the possible benefits of a hearing. Whilst you must consider costs etc., don’t feel pressured into bending over backwards for an employee – defending can signal your resolve to other employees.
Request a pre-hearing review. If the case is weak, you can get the tribunal to look at the relevant documents. Prepare evidence, documents that will clarify your disciplinary policies like contracts of employment, employee handbooks, HR policy statements, and prepare a case strategy. Also get information from the claimant, as this will allow you to clarify the particulars of the claim amd enable you to back up your case.
Finally prepare witness statements and relevant papers (a ‘bundle’). These must be exchanged with the claimant and the tribunal members prior to the hearing.
How is an employee tribunal hearing conducted?
Tribunal hearings are not court hearings – the process is less formalised, and they follow a different set of rules. Yet the aim is always to be purposeful, transparent, and to reach a fair decision.
The hearing is public, evidence is assessed on the balance of probabilities. Unlike in legal trials, nothing much be proved ‘beyond. The running order is not fixed but as a general rule, the employer goes first in cases of unfair dismissal, and the claimant goes first in cases of discrimination. Each side pays their own legal costs, claimants cannot obtain legal aid but may receive money and counsel from trade unions.
Tribunals prefer witnesses to written statements – most tribunals involve an informal questioning of the requested witnesses so it’s a good idea to do so when appropriate.
Try to use senior witnesses when explaining employment policies and be prepared to use expert witnesses if needed. Though rare, an expert witness in an employment tribunal can be used if the case hinges on a technical point.
Use straightforward facts and avoid character witnesses. And if you act as a witness, remain composed, direct and professional.
How that the decision made, and can businesses appeal against it?
Once the decision is reached, it will be sent in written form to both parties. Most decisions are announced within a few days of the case concluding – but may take significantly longer in complex cases.
If you are unhappy with the decision and feel it is incorrect, you can either appeal or request a review of the case however appeals must be based on points of law and be made within six weeks. The Employment Appeal Tribunal will investigate – though the majority are unsuccessful.
And review requests must be made within 14 days. Again, most do not affect the tribunal decision.
How are awards decided?
Awards are typically given in successful cases of unfair dismissal, discrimination, and breach of contract.
Unfair dismissals awards are made up of a basic and a compensatory reward. Basic awards are calculated on a fixed formula. This formula takes age and service into consideration, and is capped at £13,500. Whereas compensatory awards are based on the unfairness of the dismissal and the loss of past/future earnings. It is capped at one year’s gross wages and is up to £74,200.
Discrimination awards are unlimited. Claimants can also claim compensation for offence taken and break of contract awards are capped at £25,000. Claimants may also make unlimited claims in ordinary courts.
Where can I get more business advice on employee tribunals?
Acas provides literature and training courses, as well as acting as a conciliator in specific cases – find out more here.
Go to an expert
You should also consider seeking the advice of a solicitor or specialist consultant as it may save you money in the long run.