CIPD - Employment tribunals

Employment law

Revised April 2009

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 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 (usually 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 an employment dispute, employers and employees may attempt to resolve matters either:

between themselves directly
by using the pre-claim concilation service offered by Acas, or
by the use of a private mediator or arbitrator.

Once employment tribunal proceedings commence, 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 Employment Tribunals Act 1996 consolidated legislation dealing with the powers and make up of employment tribunals.

Employment tribunals themselves are governed by the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861). The Employment Act 2008 has also made certain changes to the powers of employment tribunals which will take effect from 6 April 2009.

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 were not a success and, although they had been in force for less than five years, the Employment Act 2008 implemented the wholescale repeal of the system on 6 April 2009.

See our factsheet on handling discipline and grievances in the workplace for more information on these procedures, their 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.

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.
Check that they have followed the revised Acas Code of Practice on discipline and grievance procedures¹.
If the claim refers to a dismissal, ensure that they have exercised the right of appeal in accordance with their employer’s internal 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.

It is very important that employers deal with any ET3 forms as a matter of priority, taking legal advice if necessary. If the respondent does not return the claim form in time, it is likely not to 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. From April 2009, Acas provides a free ‘pre-claim’ conciliation service for workplace disputes that cannot be resolved internally and are likely to become tribunal claims. Acas also conciliates once claims have been started: the Acas officer contacts both parties in the dispute and explores whether the claim could be settled without proceeding to a full tribunal hearing.

If the parties reach an agreement, 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.
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.

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.

Compromise and settlement of claims

As noted above, there are two ways of 'compromising', or settling, claims once they have been presented, 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 settle only 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, through a confidentiality clause, ensuring 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

ACAS. (2009) Disciplinary and grievance procedures. Code of Practice 1. London: Acas. Available at: http://www.acas.org.uk/CHttpHandler.ashx?id=1047
Employment tribunal and EAT statistics (GB) 1 April 2006 to 31 March 2007 [online]. Available at: http://www.employmenttribunals.gov.uk/Documents/
Publications/AnnualStatictics0607.pdf

Employment tribunals