What happens if your small business is taken to an employment tribunal?

Regardless of how well you run your business, there could come a moment when an employee takes you to an employment tribunal. In 2018/19, some 35,429 cases went to court, an increase of 26%, with some suggesting the cost to UK businesses being in excess of £1bn! 

An employee can take you to an employment tribunal over issues such as pay, dismissal and discrimination. If you lose the case, you may have to pay compensation or reinstate the employee. If you win, it is unlikely you will receive compensation however you may at least have your costs covered if the claimant acted unreasonably or their case had no chance of success.  

How does an employment tribunal work?

  • You will receive an ET1 form through the post – this is the form the employee completed to make their claim 
  • You must prepare a response to this within 28 days either online or in writing. The response is known as an ET3 and must include, among other things, whether you are resisting the claim and your reason for doing so, and the procedures followed before the employee was dismissed. 
  • Keep it simple but do remember to include all the key events
  • Number each paragraph for easy reference 

Case management stage

Once your ET3 form is accepted, the claim then proceeds to the case management stage, which is when documents are exchanged, and the date and length of the hearing is published.

Documents you need to bring

Preparing documents for a tribunal can be time consuming so make sure you leave enough time to do this. You must also give the ex-employee seven days’ notice of any documents which you will be including in the case. 

The tribunal will want to see:

  • An employment contracts
  • Payslips
  • Pension scheme details 
  • Notes from previous meetings 
  • Emails, letters or text messages between you and your former employee
  • Copies of witness statements supporting the defence or claim

What is document disclosure?

The case management order made by the tribunal will explain when disclosure should be done. This involves both sides showing the other documents they have which they think are relevant. 

Trial bundles

At the hearing the tribunal will need to have copies of documents that the parties want to rely on. This is called the “trial bundle”.

Usually the tribunal requires a single “agreed” bundle. This means that the parties agree what documents are going into the bundle, which is not the same as saying the contents of the bundle are undisputed.

It is common practice to set out the bundle in the following way, with an index at the front:

Witness statements

  • Claimant’s witness statement
  • Claimant’s witnesses
  • Respondent’s witness statement
  • Respondent’s witnesses

Pleadings

  • The ET1 and ET3 (and any requests and replies for further information on these)
  • Any relevant tribunal orders (usually the only relevant orders will be those issued as a result of a preliminary hearing, where particular legal issues have been decided)
  • Any relevant documents produced as a result of tribunal orders such as chronologies or lists of issues
  • Discrimination questions and replies

Employment documents — in chronological order

  • Correspondence and emails
  • Minutes of meetings
  • Statements and other evidence taken in grievance hearing
  • Discrimination diary
  • Policies and procedures
  • Contracts

Documents relating to compensation/remedy

  • Schedule of loss and documents relevant to financial loss (e.g. job applications, payslips)

What happens on the day of an employment tribunal?

A hearing, if the case reaches this stage, will be heard by an employment judge sitting alone. Although this may differ for more complex cases. 

  • On arrival, check in with the clerk, who will ask both parties if they have a representative and for any documents, witness statements and a certificate from mediation service Acas to provide proof that both parties have spoken to them.
  • If you have no representation, then you will be expected to bring any notes and evidence to the tribunal.
  • The employee will give their side of the argument first, then you will have your opportunity to respond. You will both be subject to cross examination from either the other parties representative or the tribunal judge. 
  • Hearings can last from an hour to a number of days. 
  • Testimonies are not given under oath, however, if the tribunal finds that you have given false information then this can have an adverse effect on your case. 

What happens once the tribunal is over

At the end, the tribunal will announce the judgment and the reasons for it; a copy will be provided to both sides on the day or shortly afterwards.

If the employee wins, then the tribunal will indicate what steps you should take to make compensation and set a deadline for reparation. If you do not stick to this, then you could find yourself on the end of enforcement proceedings.

If the employee loses, then there is a 14-day window for the tribunal to be asked to reconsider. If the employee is still dissatisfied with the result, the employee can always appeal.

And you, the employer, also have the right to appeal if you lose the decision.

Because employment law is so complex and the ET1/ET3 forms are crucial to any claim/defence, it is a good idea to bring in a professional to help you prepare your case. Cawley and Davis are happy to assist you with this or an other employment law matter.

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