An overview of how employment legislation is made in the UK
In the UK most employment law is categorised as 'civil law' or 'private law', meaning that it is enforced as a result of one party (the claimant) suing another (the respondent) either for compensation or some other remedy in a civil court. The claimant, who is normally a former employee or worker, an existing employee or worker, or a failed job applicant, therefore uses the court system to allege that the respondent (their employer or former employer) has caused them some kind of detriment and has done so in contravention of the law.
This factsheet for CIPD members explains the key principles according to which the civil court system operates when handling employment cases.
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Civil and criminal courts
In one or two areas of employment law, cases are brought before the criminal courts. This can happen, for example, when an employer is accused of failing to comply with health and safety regulations, or when it is alleged that an employer has breached immigration regulations by unlawfully employing someone from outside the European Union. Such matters are usually decided in the Crown Court, the case being heard by a judge and jury. In criminal cases the burden of proof nearly always lies entirely with the prosecution, the standard of proof being 'beyond reasonable doubt'. In other words, a jury is instructed not to convict unless it is certain that that the defendant is guilty of the offence of which they are accused. Criminal cases are brought on the instructions of state agencies such as the Health and Safety Executive or the Crown Prosecution Service. If there is a guilty verdict, some kind of punishment is exacted on behalf of the State which is nearly always a fine when a corporation is the defendant.
The civil courts operate under different rules to the criminal courts. Here the standard of proof that is applied is 'on the balance of probabilities', making cases a great deal easier to prove than when the standard of proof is 'beyond reasonable doubt'. Moreover, the burden of proof varies depending on the type of claim that is being brought. As a rule it is the claimants' task to prove their case on the balance of probabilities, but in the field of employment law this is often not so. Sometimes it is reversed, the respondent being assumed to have acted unlawfully and being required to persuade the court otherwise. When an unfair dismissal case comes before a tribunal, it is possible for the burden of proof to switch twice during the course of proceedings. It is for the claimant to prove that they have the right to pursue the claim and for the respondent to prove that the reason for the dismissal was one which is lawful. On the question of whether or not the respondent acted reasonably in the way that it handled the dismissal, neither side has a burden of proof. The tribunal simply listens to the evidence presented and makes its decision 'on the balance of probabilities'. In discrimination cases, once a claimant has satisfied the tribunal that they have a 'prima facie case' by presenting facts from which it can be assumed that an unlawful act of discrimination has occurred, the burden of proof switches to the respondent.
The civil court system is hierarchical which enables a losing party to appeal their case to a higher court when there are grounds for arguing that a lower court has either misapplied the law or misinterpreted it in some way. Importantly, when a higher court makes a ruling on a point of legal principle, that then becomes a binding precedent which all the lower courts then have to observe when similar cases are subsequently brought before them.
Unlike the criminal courts, except when a decision is either perverse or biased, it is only possible to appeal a case up to a higher civil court on a question of law. Questions of fact cannot form the basis of appeals. So, once a court has made its mind up about which party it thinks is telling the truth about events, that decision stands and can't be appealed. Only when there is a question mark over the way the court has interpreted or applied the law, can an appeal proceed.
Bringing a claim
Employment cases start in one of three courts:
- the employment tribunal
- the county court
- the High Court.
Which court a case is taken to depends in part on what legal matter has to be decided and partly on the level of compensation that the claimant is seeking.
As a general rule, matters that relate to an alleged breach of an employment statute (that is an Act of Parliament or a set of regulations issued under an Act of Parliament) are heard in an employment tribunal. Matters that relate to alleged breaches of the common law such as a breach of contract or an act of negligence go to the county court. The High Court also hears common law claims, but normally only does so when the level of damages being sought by the claimant is in excess of £50,000.
There are, however, some significant exceptions to these general rules. Employment tribunals can, for example, consider claims that relate to breaches of contract when:
- the case has been brought by a former employee, and
- compensation being sought is less than £25,000.
By contrast, there are some statutory matters that can be considered in the county court or in the High Court. This can occur, for example, when a claimant wishes to pursue an equal pay claim. Normally such a matter is dealt with by the employment tribunal, but it can only do so if the claimant submits their claim form within six months of a date on which the employer is alleged to have been acting unlawfully. As the time limit observed in the county court is six years, and because the right to equal pay for equal work is a contractual as well as a statutory right, those who miss the tribunal's six month deadline have an alternative potential avenue open to them.
Employment tribunals date from 1998 and since 2007 have been presided over by employment judges. They used to be called industrial tribunals and were previously presided over by chairmen. In Northern Ireland the term industrial tribunal continues to be used.
The industrial tribunal system was established in the 1960s to hear specialised cases relating to training levies (long-since abandoned). Over time, as employment law developed, their remit grew steadily. They can now hear over 80 different types of claim. These include disputes relating to all the principal employment rights that have been established by statute over recent decades:
- unfair dismissal
- unlawful discrimination
- unauthorised deductions from wages
- redundancy payments
- Working Time Regulations
- equal pay
- National Minimum Wage
- whistleblowing (that is breaches of the Public Interest Disclosure Act)
- family-friendly employment regulations (for example maternity/ paternity leave, right to request flexible working, and so on).
Since February 2017, employment tribunal decisions have been published on a government website.
Up to 2013 the number of claims being submitted to employment tribunals grew substantially. In 2009/10 the total number of claims peaked at 236,000, after which it reduced somewhat to 191,542 claims in 2012/2013. This compared with figures of around 80,000 in the 1990's and 35,000 in the 1980's. In many respects the growth was not surprising as after all, employees had gained a great deal of new legal rights in this period, but it also reflected a greater willingness on the part of workers to take legal action in order to resolve a dispute. Between June 2013 and July 2017 most people wishing to bring a case to an employment tribunal were required to pay a fee. The impact was substantial, the number of claims reducing by 70 to 80 per cent.
The fees system became the subject of legal challenge by the Unison trade union which alleged it was unlawful for a government minister to introduce the new system without the approval of Parliament. In July 2017, the Supreme Court ruled that regulations introducing the regime were both unlawful and discriminatory (see R(Unison) v Lord Chancellor ). The court quashed the regulations and employment tribunals stopped taking fees with immediate effect. Justice minister Dominic Raab subsequently confirmed that all fees paid so far would be refunded, and accepted that the government had not “struck the right balance in this case”. However, he did not rule out another fees regime being introduced in due course.
Employment judges and panels
It used to be the norm for employment tribunal cases to be heard by panels of three people, consisting of the employment judge (an experienced lawyer) and two lay members. This remains the case in some areas of jurisdiction, but since April 2012 it has become much more common for judges to hear cases 'sitting alone'. This now includes unfair dismissal cases and those concerning working time issues.
Lay members are experienced practitioners who are able to bring their knowledge of practical management to the proceedings. One is appointed from the 'employers' list' and is often an experienced HR manager, the other comes from the 'employees' list' and is often someone with extensive experience as a trade union representative. When a three person panel hears a claim, their decision is almost always unanimous, but occasionally a majority decision is reached. It would be highly unusual for the two lay panel members to out-vote the employment judge, but it can theoretically happen.
When they were originally established the intention was that industrial tribunals should dispense justice in a much more informal manner than is usual in the UK court system. In particular it was envisaged that the parties to a dispute would represent themselves, or that trade union representatives would typically represent claimants. This does still happen in many cases, but increasingly the parties are represented by lawyers. Moreover, it is from this group of specialist employment lawyers that employment judges are selected. The result has been an increasing formalisation of many proceedings, as well as an increase in the costs associated with litigation.
That said, it is still the case that many claimants in particular either represent themselves or bring a non-professional representative along with them. In such cases employment judges take great care to ensure fairness, avoiding the use of obscure legal language and taking a more active role in the questioning of witnesses.
Employment tribunals currently operate in 26 locations across the UK. However, many of the smaller offices are now administered from a reduced number of regional offices. It is to these offices that claim forms (ET1s) are sent and logged before copies are sent out to respondents. They in turn are obliged to complete response forms (ET3s) and to return them within 28 days.
Appeals from employment tribunals are taken to the Employment Appeals Tribunal (EAT) and then to the Court of Appeal, or in Scotland, to the Court of Session. Appeals from the Northern Ireland industrial tribunals go directly to the Court of Appeal.
The role of Acas
Acas (Advisory, Conciliation and Arbitration Service) plays a significant role in the employment tribunal system and is likely soon to play an even greater role. It is government-funded, but is operationally independent of government.
For many years Acas conciliation officers have sought to broker a settlement between the parties in tribunal cases ahead of a full hearing In many cases they are successful, leading to the withdrawal of the claim.
In April 2014 a new set of arrangements was introduced which gave Acas conciliation officers a much more prominent role. In a bid to encourage the parties to reach out-of-court settlements and so reduce the costs of running the tribunal system a new pre-claim conciliation system came into operation. Claimants are now required to inform Acas of their intention to pursue a claim before formally lodging it at their local Employment Tribunal office. Acas is then obliged to offer conciliation. If conciliation is unsuccessful within a ‘prescribed period’ of one month (possibly extending to six weeks) the claimant can proceed to lodge a tribunal claim. More information is available in our Tribunal claims, settlement and compromise Q&As.
Deposits, costs and fees
Until 2013, in the vast majority of cases claimants could bring tribunal proceedings without paying any fees and without risking having to pay their opponent's costs if they lost the case. This was a very different to the established situation in most other types of civil court where it is usual for costs to be awarded against the losing side. The major exception occurred when one of the parties had a very weak case which was judged at a pre-hearing review to have little prospect of success. In such circumstances the employment judge could require this party to pay a deposit of up to £500 which was only refundable if the claim was:
- withdrawn ahead of a full hearing, or
- ultimately won, or
- ultimately lost, but the employment judge decided that the losing party did not persist with the case unreasonably.
The maximum level of deposit was doubled to £1,000 in 2012.
Cost orders are only made very rarely by employment tribunals at present, although it is often argued that they should make them more frequently. The maximum is £20,000. The most common situations in which the losing side is required to pay the costs of the winning side is when it (or its representative) is judged either to have acted 'vexatiously, abusively, disruptively or otherwise unreasonably', or to have knowingly pursued a 'misconceived' case (that is one that has no chance of succeeding). Cost orders can also be made when a party fails to comply with an order of the tribunal or unreasonably causes a hearing to be adjourned or postponed.
For more information on tribunal fees see our Tribunal claims, settlement and compromise Q&As.
From 6 April 2014, employment judges have had the right to levy fines of up to £5,000 on employers who lose cases and have been found to have acted unreasonably or negligently in defending a claim.
County courts and the High Court
Not all employment-related cases are heard in an employment tribunal. When a dispute relates to the common law, as is the case when a matter relates to an alleged breach of contract, or to negligence or defamation, it will be heard either in the county court or in the High Court. Importantly these categories include personal injury claims of the kind that people bring against their employers when they suffer a work-related injury or mental breakdown.
The High Court will only ever hear cases in which more than £15,000 in damages is being sought and or £50,000 in the case of personal injury cases. In either court, however, cases are heard by judges sitting alone, except in very rare circumstances.
There are 220 county courts across the UK and 27 centres at which High Court claims are heard. In either case the parties must either represent themselves or be represented by a lawyer. In the case of the High Court, representation is restricted to barristers and a relatively small number of solicitors who have applied successfully for rights of audience. This means that litigation can be very expensive, particularly for the losing side against whom an order to pay their opponent's legal costs is usually made.
Appeals from county courts or the High Court are taken directly to the Court of Appeal, or in Scotland, to the Court of Session.
Employment Appeals Tribunal
The Employment Appeals Tribunal (EAT) sits in London and in Edinburgh where it deals with appeals from Employment Tribunals.
The losing party in an Employment Tribunal case has 42 days to appeal the decision should they wish to, setting out in writing the grounds for appeal.
Until the introduction of employment tribunal fees in July 2013, around 2,000 appeals were made to the EAT each year, but over half of these were typically rejected, either because they were out of time or because they were judged by the EAT on a preliminary reading of the paperwork to have no reasonable chance of success. A few hundred more were typically withdrawn for other reasons or dismissed by the EAT at a preliminary hearing. As a result only around 350 cases each year ever proceeded to a full hearing. The introduction of employment tribunal fees in 2013 led to a reduction in the number of cases being appealed to the EAT by around a quarter. It is likely that the number will increase again following the abolition of fees in July 2017.
While the number of appeals are relatively small, they are very important. This is because EAT judgments set out how the law should be interpreted and applied in the future by all Employment Tribunals.
In the past it has been the norm for EAT cases to be presented to a panel of three consisting of a High Court judge and two lay members. However, since April 2013, judges usually sit alone unless there is a need for lay members to be present.
When an appeal is heard by the EAT, there are four possible outcomes:
- the appeal may be dismissed
- the appeal may be allowed
- the appeal may be allowed and remitted back to the original employment tribunal panel to make a final decision, or
- the appeal may be allowed and remitted to a differently constituted employment tribunal panel to rehear the evidence and make a final decision.
Cases often need to be remitted back to the employment tribunal so that a final judgment can be made because it is the EAT's primary job to make decisions about how the law should be interpreted as a matter of general principle. How a case should be decided in the light of particular facts, or what is the appropriate level of compensation should be are matters for employment tribunals to determine.
All EAT decisions are published on its website. Decisions that have the most legal significance are reported in journals such as the Industrial Relations Law Reports (IRLR) or Industrial Cases Reports (ICR).
Court of Appeal, Court of Session and Supreme Court
Employment Appeal Tribunal rulings can be appealed to the Court of Appeal or, in Scotland, to the Court of Session. This happens relatively rarely because once litigation reaches this level in the court hierarchy the losing side is usually required to pay the winning side's costs. Moreover, because senior barristers are typically employed to argue the case, costs can be extensive.
Nonetheless, the Court of Appeal and the Court of Session are typically called upon to judge a number of employment related cases each year and they do from time to time overturn a judgment of the Employment Appeal Tribunal and sometimes reinstate an original employment tribunal decision.
Court of Appeal cases are heard in London by panels of three Lords Justices of Appeal, sometimes including the Master of the Rolls (the most senior Appeal Court judge). In the Court of Session in Edinburgh panels of three or five judges hear cases.
A further appeal to the Supreme Court (formerly the House of Lords) is only possible where a point of law that has 'general public importance' is disputed. In other words the principles must be sufficiently significant to have implications for many employers and employees and not just the particular parties to the case. The number of employment-related cases that are heard by the Supreme Court each year fluctuates, but it is rarely more than six or seven. The Supreme Court has the final say in any matter which exclusively concerns UK law.
European Court of Justice
When questions that relate to the application or interpretation of European law have to be determined, it is possible for one of the parties to make a further appeal beyond the Supreme Court to the European Court of Justice (ECJ). The ECJ sits in Luxembourg and is comprised of twenty-eight judges, representing each member state of the European Union.
The ECJ only ever rules on the correct interpretation of EU law. It does not hear all the evidence in a case. Once it has reached a decision, the matter is referred back to the national courts so that a final judgement can be reached given the facts of a particular case in the light of the ECJ’s ruling.
A decision can be made to halt proceedings in an employment tribunal, the Employment Appeal Tribunal or the Court of Appeal pending the referral of a question on a point of EU law directly to the ECJ. This takes several months or even years to obtain, but it means that the parties are not required to go through the even longer process of appealing the case right up the court hierarchy. At present it is not clear what status European Court of Justice rulings will have following the UK’s departure from the European Union or during any transition period that may be negotiated in the short term. It is likely that all existing rulings will be binding on the UK courts, but the extent to which UK courts will interpret the law differently in the future remains a question of debate.
This factsheet was written and updated by Stephen Taylor.
Stephen Taylor: Senior Lecturer in Human Resource Management (HRM), University of Exeter Business School and Chief Examiner for the CIPD
Stephen Taylor is the author/co-author of several HRM books, including the bestselling texts 'Human Resource Management' (with Derek Torrington, Laura Hall and Carol Atkinson) and ‘Armstrong’s Handbook of Human Resource Management Practice (with Michael Armstrong).
He is a frequent speaker at HR conferences and Acas events for employers, and has regularly represented parties in employment tribunals. He also undertakes HR consultancy, tutoring and training work, and previously worked in a variety of HR management roles in the hotel industry and in the NHS.
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