This article will outline what to expect should you be unfortunate enough to receive an employment tribunal claim and then set out some of those matters you will need to consider in preparing for a tribunal hearing.
This can't be happening!
It can be a daunting experience.
You're sitting at your desk, the post has arrived and you're opening the usual collection of junk mail (bin), offers of service from well meaning businesses (usually the bin) and the mail you actually want or need to read. One of those you open is an inoffensive looking white envelope but what spills onto your desk is a collection of papers from Manchester Employment Tribunal.
There'll be a covering letter, a small booklet telling you what you should do, a form to reply on (ET3) and what's known as an ET1 form, the claim itself. At some point during the initial confusion caused by receiving documents you've never seen before it will dawn on you - someone has lodged a claim against your company, and perhaps even you as an individual. You might want to throw it in the bin but this is one piece of mail you cannot afford to throw away.
I've dealt with many clients over the years and the moment of realization that your company is facing an employment tribunal claim can result in many different emotions. Anger, confusion, disbelief, genuine hurt and in some cases a guilty acceptance of the consequences of former actions. It's an emotional reaction and everyone, without fail, reacts with some form of feeling.
Some employers are enraged and want nothing more than to bring hell and damnation down upon that ungrateful, no good ex-employee who they bent over backwards to help. In an attempt to assuage that emotion the employer may well pick up the phone and condemn the sinner in suitably colourful language or worse, write a charged letter, filled with righteous indignation and no doubt incriminating material which the employee's lawyer will read with glee. Angry actions while understandable do nothing for credibility and will be exploited should you find yourself at a later date sitting in a witness chair being cross examined by counsel.
Other employers will do nothing. Fall into a state of paralysis and ignore the problem hoping it will go away or decide that it's just not that important in the scheme of things. In both cases, should you fail to respond to the claim in a timely manner, you risk what's called a default judgment. That means you automatically lose the liability argument. In other words you lose the right to defend yourself. They win you lose and a hearing will be arranged to decide just how much money you'll have to pay the Claimant. There are ways of challenging a default judgment but there's no guarantee of success and why start with a hill to climb. So it's important to act. You generally have 28 days to do so.
Take a breath
So what should you do? The first thing is to take a deep breath. Then sit down and read the claim (ET1 form) carefully. Treat it like a business proposal or customer complaint, anything that can help you take a detached and professional view; and take your time. You need to understand exactly what this person is complaining about. Examine closely the facts this person relies upon to make the claim. Are those facts correct? Can you show the facts he or she is relying upon are in fact wrong, and whether therefore the assumptions based on those alleged facts may be flawed. Consider who within your organization may have knowledge of those facts. Those people may be your witnesses. Consider too what documents exist that may relate to the events the Claimant has outlined. Was there a related grievance? Was there a disciplinary procedure? Had this person a contract (and by law they should have)? Are there relevant policies in the company handbook? How about recent email records? Wage slips. These are all documents that you should secure and safeguard.
Once you have satisfied yourself that you understand the claim and have started to secure all the relevant documentation, diary the date on which a defence to the ET1 must be filed. The covering letter from the tribunal should include in bold font the last day on which you can reply without risking a default judgment. That's your initial timetable. Treat it as you would any date that is vital for your business.
And now it's time to take some professional advice. You may have a company that provides employment law advice; it may be your solicitor. Whoever it is, they will be grateful that you have already taken the time to understand the claim and started to organise any relevant information/documentation. It will help them to fully understand the situation, saving time for you both, and time as we all know is money.
As an aside, it's not every case that will actually need legal assistance. There are many simple claims out there. An example might be a wage claim, in which a current employee believes his wage is wrong. You usually don't need a lawyer and the associated costs to address a misunderstanding over wages.
There's even an argument for handling a straightforward unfair dismissal claim on your own. There's plenty of help out there on the net and if you know the basics of what's required to prepare a case a little common sense can take you a long way. Claimants do it all the time, and what's more, the tribunal will bend over backwards to help a Claimant if they're not represented. If neither party is represented then the playing field is somewhat leveled. That said, I do recommend that you take initial advice just in case there is some tricky legal issue which needs addressing. If the claim involves any allegation of discrimination then advice is a must. However the fact remains that after taking initial advice you may find that you can act for yourself, or at least with some guidance from an advisor in the background. It's certainly cheaper! What follows is a brief guide which may help. It is not however exhaustive and should not be relied upon in isolation.
What happens next?
Each practitioner works a tribunal in their own way. My own practice is to have an initial chat with the client and then review all the relevant documentation, including of course the ET1. From the ET1 I can identify the legislative basis of each claim, which in turn helps define the issues which a tribunal will have to determine in coming to a decision.
I also need to grasp the facts of each case. In doing so I will test a client's stated version of the facts against the documentation provided to ensure that those facts stand up. That might seem in some way disloyal to a client, as if I doubt their version of events. What I am in fact doing is what the other side and the tribunal will do. Testing the evidence. If there are flaws then better we identify them first and deal with them to our best advantage, rather than leave the other side to exploit them. In essence what I am looking for is a "theory" of our case. What we say actually happened, which will explain and exonerate our position. Having this "theory" in place helps focus a defence on what's relevant. I then meet my client in person, and we can discuss in depth our strategy for continuing.
This can often be a difficult meeting. I've already talked about emotion. About the very real feelings that an employment tribunal can generate. Accusations can get very personal. People's integrity can be questioned and their honesty attacked. It's perfectly understandable that people get angry and want to fight the case to the bitter end; have their day in court, proclaim their innocence and have the tribunal condemn the unjust allegations that brought them to this public arena. Telling a client that their case is not as strong as they may want to believe in these circumstances can be unpalatable to hear. Telling them that they have a strong case but that it still might be better settling can be equally hard to accept. It often comes down to the pragmatism of cost!
Perhaps the single most important job of any representative is to assess the potential worth of a claim at an early stage. What that claim may cost the client should they lose. In addition what will the case cost to defend? And that's not just costs for representation. Cost includes the time and energy defending a case will drain from your company. In a typical unfair dismissal claim, following your dismissal of an employee you may have two witnesses: The dismissing officer and the appeal officer. There may be more witnesses than that. The likelihood is that these witnesses will have important roles in your business. Can you afford to have them out of the office for a day, perhaps two as the tribunal runs? Can you afford the time it will for them to prepare witness statements and prepare for the tribunal. What about the effect on those individuals, as they face the strain of tribunal. Will that have an effect on morale, productivity?
These are vital questions which must be addressed sooner rather than later, for what matters it if you go to tribunal and win but it costs your company thousands of pounds and destroys company morale. Be in no doubt, the chance of recovering legal costs in an employment tribunal are remote at best. Unless you have effective insurance, or are represented by a company which provides you complete cover should you follow their advice to the letter, you will probably have to spend money on legal representation. And so one of the difficult questions which must be addressed is whether it's worth pouring resources into a defence at all. It's clearly not worth it if the case is weak and you risk losing. But even if you have a strong case an early question must be, is it really worth proceeding if a reasonable sum of money will nip the case in the bud! Do we look to settling the claim?
This is where emotion hits the pragmatic wall of expediency. "We must fight" you cry, "there's a principal involved," shouts the emotion. But at the end of the day this is a business, and we need to protect the bottom line. And that's the most common conversation I have with clients. Believe me, I understand how much it might anger or hurt to even consider giving money to someone you fundamentally think is wrong or is using the system to heap injustice upon you. How such a suggestion might grate on every sinew, but sometimes it's the best thing to do. Hard as it may be you have to try and take the emotion out of the decision. You would if it was a straight forward business decision. I often suggest to clients taking the money you'd have to pay me in fees and that's your 'pot' for negotiating settlement.
The Basics
So let's assume you have a slam dunk case, we've had the initial meeting and decided to proceed with a full defence of the claim.
The basics are fairly simple. Using the information compiled to date we fill in form ET1 and set out our defence. It's then filed, in time. It's important that the defence sets out everything that we feel is relevant to the claim, because amending the defence to introduce new evidence later on can be difficult and changing the nature of your defence at a later stage can lead to contradictions which can be used by the other side to undermine credibility. That's why an early understanding of the case in all its facets is so important.
In cases where the Claimant has left your employment another useful early step is to start looking in local newspapers, trade magazines, job centre's and even checking with agencies to see what jobs the ex-employee could apply for. You should retain an ongoing record of any such positions. There's a very good reason for this. Should you eventually lose the case there will be an award to pay. The award, in very general terms is based on the money the Claimant would have earned had they remained your employee up to the date of the tribunal and sometimes beyond. So if the Claimant earned £1500 a month whilst your employee, and there have been 5 months between their dismissal and the tribunal hearing, their potential award would be £7500 (there are other elements to calculating an award including future loss too complex to discuss here). However, there is also an obligation on the Claimant to "mitigate his or her loss." In other words try and get a job. In working out the final award any money earned in a new job must be deducted. This can be significant if for example the Claimant has managed to get a better paid job. In such cases an award can be negligible (such cases are also ripe for settlement. Why spend a fortune defending the case when a small amount will finish it!). However if the Claimant has not obtained a job, it is open to the employer to argue that he or she hasn't tried hard enough and therefore the award should be reduced anyway! This can lead to a significant reduction. As it's up to the employer to prove such an allegation, it's up the employer to provide the evidence. Hence the early need to collect job positions which the Claimant could apply for.
Once the defence is filed and accepted by the tribunal the next step generally is to attend a Case Management Discussion (CMD). This is an initial hearing, usually no more than an hour to ensure all claims have been identified, the issues to be decided are clear and to provide a timetable of actions which will ensure all parties are prepared for a full hearing, at which the liability (and sometimes remedy) will be decided. Dates will be agreed and set for the full disclosure of all relevant documentation, for agreeing a bundle (an ordered and paginated collection of papers that all sides will rely upon at the tribunal itself), for providing a schedule of loss (a document setting out those monies being sought by the Claimant), for the exchange of witness statements and in all likelihood the date of the hearing itself. These are known as directions and will be confirmed by the tribunal in writing by way of Order. The CMD is also an opportunity to ask for further particulars in cases where you believe you need more information to understand the case more fully.
Sometimes there are preliminary legal issues that need to be decided prior to deciding whether a main hearing can proceed. Such issues are usually identified at a CMD but can be identified by either party at an earlier stage, particularly from the ET1. It is open for either party to ask the tribunal to determine such preliminary issues at a hearing known as a pre-hearing review. Examples of such issues would include employee status (in many claims the person claiming must satisfy the tribunal they were an employee), considering whether a claim should be struck out because it has not been filed in time (typically claims must be filed within 3 months of the act being complained about) or determining whether a person who is claiming disability discrimination is in fact disabled, as defined in the legal sense. If they're not disabled in the legal sense then there can be no claim for disability and the claim will fail.
Once the timetable is set, it's up to the parties to comply with the directions and ensure they are ready to proceed on the day/s of the hearing. Failure to comply with these directions can result in cost applications, and in severe cases not being allowed to proceed. The relevant dates should therefore be added to your diary.
Agreeing the relevant documentation and producing a bundle is usually the first step. Having that information agreed and in place makes it easier to prepare witness statements and cross reference them to the bundle.
At any stage throughout this process settlement can be discussed. It often happens that as preparations proceed each side's case becomes clearer, when for example documents are disclosed. In these circumstances one side may decide that their case is not as strong as they once thought and decide to enter into negotiations to settle. Of course all parties must agree to a settlement and there are times when a Claimant will simply want their day in court and no matter how hard you try, settlement is not possible. ACAS have a role in this and can be very useful in facilitating settlement between parties. Settlement can even take place during a hearing, when for example a witness giving evidence says something that fundamentally damages the case. If this happens it may be advisable to consider sitting down with the other side and discussing settlement. A tribunal will always be happy to grant the parties time on the day to discuss ways of cutting the tribunal short and settling.
The hearing itself can last an hour, a day, several days or weeks. My last tribunal lasted 9 days in all but that was a complicated discrimination claim. The duration of the hearing will depend on the complexity of the case and the number of witnesses to be called.
The Hearing
Tribunals were initially set up to be less formal than other courts however there is still a high degree of formality. The hearing is in public (in fact you can visit the tribunal in Manchester and ask to sit in and watch a hearing; good advice for those facing a tribunal) and is heard by a Judge and two lay persons (the panel). Each witness takes an oath or affirmation and will be expected to read their witness statement out loud. It is therefore essential that your witness statement is properly prepared and says everything that you wish to say. While it is possible for your representative to ask additional questions to flesh out your account, this is not always allowed, and some tribunals are stricter than others. Your statement will also be cross referenced with the bundle, and so it takes time as the tribunal members will have to stop and read each document you refer to in your statement. You usually pause in your reading and wait quietly as they familiarize themselves with the document. Once you've read your statement aloud, the Claimant or their representative can ask you questions (cross-examination) and then the tribunal panel may have further questions to ask. Only then can you be discharged and the next witness called. Both sides take their turn to go through this process until all the evidence is heard.
At the end of the tribunal both sides are given the opportunity to sum up their case by way of oral submissions, and then the panel will retire to consider their verdict. Sometimes they can deliver that verdict on the same day but it's often the case that the decision is reserved. That means the panel may wish to take their time to consider the evidence and must arrange to meet again to consider the matter. The decision therefore may not be immediate and you may have to wait several weeks for a result. It often takes some time for the three members of the panel to synchronise their diaries (understandable as the lay members are part time and generally have other jobs to attend to).
Conclusion
And so that's it, in a rather long nutshell. Of course there's so much more; we haven't addressed mediation or appeals or reviews or remedy hearings or a myriad of other important factors, but we have covered the basics. My hope is that the article will help lift some of the mystery and fear that surround the employment tribunal process and will give you enough incite to ask intelligent questions of those that advice you. It may even allow you to consider saving some money and having a go yourself! And naturally my final wish is that you never have to face a claim. Ignore those who use endless statistics to try to scare you into believing there's always a claim round the corner. The truth is you may never face one.
