CIPD - Employment tribunals

Employment law

Revised July 2008

This factsheet gives introductory guidance. It:

outlines the role of employment tribunals and the facilities for settling claims
looks at how a claim is made and progressed
considers ongoing and future developments
gives an overview of compromise arrangements.

The role of employment tribunals

Employment tribunals are 'industrial courts'. They are designed to deal with claims that may be brought against employers by employees relating to their employment or its termination.

Although the employment relationship is in large part governed by the law of contract, meaning that some disputes can be dealt with by the ordinary civil courts (the County Court in England, Wales and Northern Ireland and the Sheriff Court in Scotland), the majority of employment rights are contained in statute law and can only be enforced by employment tribunals (called 'industrial tribunals' in Northern Ireland). Examples are:

unfair dismissal claims
discrimination claims (race, sex, disability, religion or belief; sexual orientation, age)
equal pay claims
claims relating to deductions from wages.

In Northern Ireland, there is a separate tribunal, the 'Fair Employment Tribunal', specifically to deal with religious discrimination and political belief claims – the work of this tribunal is outside the scope of this factsheet, but see the Useful contacts section below for a link to more information.

Of course, when faced with employment tribunal proceedings, employers may wish to settle the matter without going through a full hearing, and two avenues are available to 'compromise' claims in this way:

through a compromise agreement
through an agreement achieved through Acas conciliation (a 'COT3').

This factsheet provides a brief overview of these methods of dealing with employee claims. CIPD members can see more detail in our law FAQ covering tribunals, settlements and compromise.

Go to our Tribunal claims, settlement and compromise FAQ

The legal position

The Industrial Tribunals Act 1996 (now the Employment Tribunals Act 1996) consolidated legislation dealing with the powers and make up of employment tribunals.

Since October 2004, the right of employees to bring claims is constrained by statutory dispute resolution procedures made under the Employment Act 2002.

Employment tribunals themselves are governed by the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861).

The rules governing compromise agreements are principally contained in section 203 of the Employment Rights Act 1996.

The facility to compromise claims through a compromise agreement is contained in each piece of legislation giving employees particular rights, for example, section 77 of the Sex Discrimination Act 1975.

The facility to compromise claims through a 'COT3' agreement negotiated by Acas is contained in the Employment Tribunals Act 1996.

The role of the statutory dispute resolution procedures

In October 2004, the government introduced statutory procedures with the aim of reducing employment tribunal claims by attempting to ensure that employment disputes were, where possible, dealt with by employers and employees themselves through internal procedures in the workplace. These procedures have not been a success and, although they have only been in force for less than five years, the Employment Act 2008 will implement the wholescale repeal of the current system of statutory dispute resolution by 2009 (scheduled to be in April of that year).

Until the statutory procedures are repealed they must be followed in their entirety. The procedures include steps an employer must take when dismissing an employee, and steps an employee must take to pursue a grievance with his or her employer. See our factsheet on handling discipline and grievances in the workplace for more information on these procedures, their future repeal and the renewed role of the Acas Code of Practice. CIPD members can see our Discipline and grievance procedures FAQ for more detail.

Time limits

In general, an employee must submit their claim to a tribunal within three months of the date of termination of employment, or the act (for example, harassment) complained of. Certain claims, such as for a redundancy payment, have a six month time limit.

However whilst the statutory procedures remain in force, the time limit may be extended by three months in cases where the employee has submitted an appeal against a dismissal within the three month period, or a grievance, and reasonably believes the employer is dealing with it.

Starting and responding to a claim

To start a claim, an employee (who is known as the 'claimant') must take the following steps:

Check that they are within the strict time limits for bringing a claim.
If the claim refers to a dismissal, ensure that they have exercised the right of appeal in accordance with the statutory procedures.
If the claim relates to any other matter, submit a written grievance to the employer (or former employer) and give the employer 28 days to deal with it.
Complete a Form ET1 and submit it to the employment tribunal.

Upon receipt of the ET1, the tribunal:

logs the claim
sends a copy to Acas
sends a copy to the employer (known as the 'respondent'), along with a form for the employer to respond to the claim (Form ET3).

The respondent then has 28 days to complete and return the ET3 to the tribunal. This is, in practice, a very short period of time for the ET1 to reach the right person in the employer’s business, for the employer to establish what happened to give rise to the claim, to take legal advice if necessary and to complete and physically return the ET3 to the tribunal.

It is very important that employers deal with any ET3 forms as a matter of priority. If the respondent does not return the claim form in time, it is likely to not be permitted to defend the claim. And although the respondent can apply to the tribunal for an extension of time, there is no guarantee that this will be granted.

The role of Acas

Acas, the independent conciliation service, is required by law to 'conciliate' in employment disputes presented to employment tribunals. This means that an Acas officer contacts both parties in the dispute and explores whether the claim could be settled without proceeding to a full tribunal hearing.

During the conciliation period, the parties may reach an agreement, and the claimant may withdraw the claim from the tribunal – see below.

The tribunal hearing

All matters that are accepted by the tribunal, but are not settled or withdrawn, are brought before the tribunal at a formal hearing.

An employment tribunal comprises three people (called 'members'). There is a legally-qualified Chairman or Employment Judge, who might be employed full-time or on an occasional basis. There are also two 'lay' or 'wing' members who are not usually legally-qualified but who are likely to have relevant experience for example, as an HR professional or a trade unionist. The wing member positions are both filled by open competition.

Both sides in the dispute present their cases and have the opportunity to bring witnesses along, and to cross-examine witnesses brought by the other party.

The complexity of some aspects of employment law and tribunal procedure have moved the system further away from the original aim of being relatively informal, and created unnecessary traps for the unwary.

Outcomes

After hearing all the evidence, the tribunal usually adjourns for a short period for the Chairman or Employment Judge and the lay members to discuss the case. When the tribunal reaches a decision (called a 'judgment'), it is almost always the decision of the tribunal as a whole.

Depending on the type of claim, the tribunal can award:

reinstatement
re-engagement
compensation
payment of wages or monies due to the employee. .

Changes planned

The last round of significant changes affecting tribunals (which took place in October 2004) has been the subject of a review resulting in a report making several recommendations for change (the Gibbons report1). This report has recognised that many of the changes have not had the desired effect of simplifying and streamlining the system. The Employment Act 2008 will implement some of the changes during 2009 although some other recommendations of the Gibbons report remain outstanding.

The Tribunals, Courts and Enforcement Act 2007 is a further piece of legislation which is changing the tribunal system generally.The impact on employment tribunals is not as significant as some other types of tribunal but the key aims are unification of tribunals under a single organisation with a simplified structure of two tiers.

CIPD members can see more detail of these reforms in our FAQ covering tribunals.

Go to our Tribunal claims, settlement and compromise FAQ

Compromise and settlement of claims

As noted above, there are two ways of 'compromising', or settling, claims without the need for a tribunal hearing:

through a compromise agreement
through an agreement achieved through Acas conciliation (a 'COT3').

Compromise agreements

Compromise agreements were introduced in 1993 and have the following key features:

They can only settle certain specific claims.
They must be in writing and refer to particular proceedings
They are drawn up by the parties concerned.
The employee must take legal advice on the contents of the agreement from a solicitor or qualified independent adviser with appropriate insurance cover.
The adviser must certify in writing that advice has been taken by the employee.

However, compromise agreements do have some attractions, not least the perception by employers that employment may be terminated without following time-consuming procedures, and ensuring, through a confidentiality clause, that the dispute between the employer and employee does not become public. Clearly, however, such ease comes at a price and appropriate compensation must be paid to the employee.

There have been numerous cases where former employees have challenged the validity of compromise agreements, and this means that each agreement must be carefully drafted.

Acas and COT3 agreements

As previously stated, Acas must conciliate in most claims brought in employment tribunals. This involves an Acas officer contacting both parties or their legal representatives, usually by telephone, and exploring the possibility of reaching an agreement. In fact, Acas is remarkably successful in this, with 35% of all unfair dismissal claims ending in a conciliated settlement in the year ending March 2007, and around 40% of most discrimination claims².

The main advantages of the COT3 form of settlement drawn up by Acas are:

It is free of charge.
It can easily settle all claims between the parties, including ruling out future claims.
No legal advice is required.

Useful contacts

Acas
Business Link
Department for Business, Enterprise and
Regulatory Reform (BERR)
Tribunals Service
Industrial Tribunals and the Fair Employment
Tribunal (Northern Ireland)
Judicial Appointments Commission
The Commission is responsible for recruitment of lay members to employment tribunals. Their advice to CIPD members who are interested in applying to act as a lay member is to keep an eye on their website and look under 'News and information'.

References

GIBBONS, M. (2007) Better dispute resolution: a review of employment dispute resolution in Great Britain. London: Department of Trade and Industry. Available at: http://www.berr.gov.uk/files/file38516.pdf
Employment tribunal and EAT statistics (GB) 1 April 2006 to 31 March 2007 [online]. Available at: http://www.employmenttribunals.gov.uk/publications/
documents/annual_reports/ETSAS06-07.pdf

Employment tribunals