An overview of how UK employment legislation is created
In the UK most employment law is categorised as 'civil law' or 'private law', meaning that it’s 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 is normally an employee or worker, a former employee or worker, or an unsuccessful job applicant. The claimant uses the court system to allege that the respondent (their current 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 the UK, most employment law is categorised as 'civil law' or 'private law', meaning that it’s 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 an employee or worker, a former one, or a failed job applicant, therefore uses the court system to allege that the respondent (their current or former employer) has caused them some kind of detriment in contravention of the law.
The focus of this factsheet is the operation of the civil court system when handling employment cases. However, it’s important to remember that 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’s alleged that an employer has breached immigration regulations by unlawfully employing someone. Such matters are usually decided in the Magistrates or Crown Court. In the Crown Court the matter is 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 criminal court should not 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 usually a fine when a corporation is the defendant although company directors can be imprisoned for serious criminal offences.
The civil courts operate under different rules. Here the standard of proof that is applied is 'on the balance of probabilities', making cases easier to prove than when the standard of proof is 'beyond reasonable doubt'. Moreover, who has the main 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’s reversed, the employer being assumed to have acted unlawfully and being required to persuade the court otherwise.
When an unfair dismissal case comes before a tribunal, it’s possible for the burden of proof to switch twice during the proceedings. It is for the employee to prove that they have the right to pursue the claim and for the employer to prove that the reason for the dismissal was one which is lawful. On the question of whether or not the employer 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 employer to show it did not discriminate.
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 must observe when similar cases are subsequently brought before them.
Unlike the criminal courts, except when a decision is either perverse or biased, it’s 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 the 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, can 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 at 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.
Industrial tribunals date from the 1960s, and were renamed employment tribunals in 1998. Since 2007, they have been presided over by employment judges. In Northern Ireland, the term industrial tribunal continues to be used.
The remit of employment tribunals has grown steadily over time. They can now hear over 80 different types of claim including:
- 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 etc).
They can also deal with breaches of the Working Time Regulations, and the National Minimum Wage rules.
Before 2013 the number of claims being submitted to employment tribunals steadily increased. When significant employment tribunal fees were introduced between 2013 and 2017, the number of claims fell by 70 to 80 per cent. After four years the Supreme Court intervened ruling the tribunal fees scheme unlawful and fees were abolished. The number of single claims for the period April to June 2018 increased by 165% compared to the same period in 2017, before the fee abolition. However, the government has said it intends to bring back tribunal fees in another form so there may be further fluctuations in future.
Since 2017, employment tribunal decisions have been published on the GOV.UK website.
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 it has become more common for judges to hear cases 'sitting alone', including unfair dismissal and working time cases.
Lay members are experienced practitioners who can 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 unusual for the two lay panel members to out-vote the employment judge, but it can theoretically happen.
Tribunals were intended to be a more informal alternative to 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. But as employment law has become more complex, increasingly the parties are represented by lawyers. Moreover, it’s 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 associated costs.
That said, it’s still the case that many claimants 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. It’s government-funded, but 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.
Since 2014, Acas conciliation officers have been given a more prominent role in encouraging the parties to reach out-of-court settlements and so reduce the costs of running the tribunal system. Under the pre-claim conciliation system, claimants are 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
In the vast majority of cases, claimants can bring tribunal proceedings without paying any fees and without risking having to pay their opponent's costs if they lose the case. This is very different to the established situation in most other types of civil court where it’s usual for costs to be awarded against the losing side.
The major exception occurs when one of the parties has a very weak case which is judged at a pre-hearing review to have little prospect of success. In such circumstances, the employment judge can require this party to pay a deposit of up to £1,000 before allowing the claim to continue. The deposit is only refundable if the claim is:
- 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.
If the deposit remains unpaid, the relevant part of the claim will be struck out. If the deposit is paid and the employee's claim fails, the employee will be deemed to have acted unreasonably in bringing the case, and will be at risk of costs.
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 costs, see our Tribunal claims, settlement and compromise Q&As.
Employment judges also have the right to levy fines of up to £20,000 on employers that have been found to have breached the claimant's employment rights, and the breach has aggravating features. There is limited guidance on what may be an aggravating feature, but a tribunal may be more likely to find that an employer's behaviour deserves a fine where the action was deliberate or malicious and the organisation has a dedicated HR team. The financial penalty is payable to the government and is in addition to any compensation awarded to the employee. There is a reduction if the penalty is paid within 21 days of the notice imposing the penalty.
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, such as in 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 work-related injuries or mental health issues.
The High Court will only hear cases in which more than £15,000 in damages is being sought (£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 these courts 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 to do this. 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 Appeal Tribunal
The Employment Appeal 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.
While the number of appeals to the EAT is 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.
EAT 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’s the EAT's primary job to make decisions about how the law should be interpreted. How a case should be decided based on particular factual issues, or what the appropriate level of compensation is, 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 law journals such as the Industrial Relations Law Reports (IRLR) or Industrial Cases Reports (ICR). The British and Irish Legal Information Institute (Bailii) law report website is free to use.
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 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 EU law have to be determined, a UK national court can choose to ask the Court of Justice of the European Union (CJEU) for clarification on the interpretation of EU law. It’s also possible for private individuals or organisations to bring a claim to the court although this happens rarely. The CJEU sits in Luxembourg and from 2019 is comprised of 56 judges, two from each member state of the European Union.
The CJEU 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 on the facts of a particular case in the light of the CJEU ruling.
This factsheet was written and updated by Stephen Taylor and last updated by Lisa Ayling, solicitor and employment law specialist.
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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