What are Employment Tribunals?

Employment Tribunals are used to settle workplace disputes between employees and employers that cannot be resolved through communication or mediation, where an alleged breach of employment law has occurred.

The cases for which Employment Tribunals are best known are probably unfair dismissal and redundancy claims. While these do make up a significant proportion of all complaints, tribunals deal with a wide breadth of issues including disability discrimination, sex discrimination and equal pay. 

Cases are decided based on employment law, most commonly in line with the Employment Tribunals Act 1996, the Employment Rights Act 1996 and the Equality Act 2010, though other legislation is considered. The Tribunal has the power to award compensation or other remedies if the employer is found to have acted unlawfully.

The record compensation award was £4.5m to a hospital consultant for sex and race discrimination, though some cases are fought over relatively small amounts of money and are concluded in an hour. Needless to say, most cases fall in between those extremes.

The hearings are heard by the judicial body, the Employment Tribunal, and are led by a senior judge who has the statutory title of President.

Tim Jones, Head of Employment Law at Higgs LLP, said the Employment Tribunal continued to suffer severe delays due to the amount of claims being issued and insufficient resources to meet that demand.

“The process can be painfully slow at the moment,” said Tim. “I am advising on a fairly straightforward disability discrimination case currently and the preliminary hearing was due in May. That has been postponed until November when we’ll get directions, with the hearing likely to be well into 2024.

“It’s partly a Covid hangover but it’s also the consequence underfunding. The Government has invested into the Employment Tribunal system to try and clear the backlog, but that is a drop in the ocean, really. The whole system needs a re-boot.”

Not-so-public hearings

Employment Tribunals were traditionally held in person and in public and judgments published on an online register, but the growth in virtual hearings risks the principle of open justice.

“The vast majority of hearings are still taking place online, with only the more complex cases taking place in person,” said Tim. “While theoretically members of the public and journalists can log on and listen, there are questions around how they know the hearings are taking place and how they obtain access.

“This opens a debate about access to justice. In my opinion, we have an opportunity to reflect. Are these changes for the best and do they comply with protocol and policy? Are they working well?”

Leading the way so far in 2023 has been unauthorised deduction from wages. This occurs when an employee has either been unpaid or underpaid. There must be an actual deduction of wages, not just a proposal to deduct wages. Employees are protected from unlawful unauthorised deduction from wages through The Employment Rights Act 1996 (ERA). The Act extends to individuals who have entered into other contracts to personally perform any work or service.

Late payment of wages is also included as a deduction of wages.

The second most common type of complaint was breach of contract. Both employers and employees can be in breach of a contract of employment.

A breach of contract happens when either the employer or the employee breaks one of the terms of the contract of employment. This could be, for example, unpaid wages or failure to work agreed hours. A breach can occur over a verbally agreed term, a written term or an implied term of a contract. 

Other common complaints around breach of contract include bonuses, gross misconduct and restrictive covenants, usually when an employee has taken intelligence or clients with them to a new role.

Tim said: “It’s difficult to know what is driving the high number of cases involving unauthorised deduction from wages and breach of contract. What I can say with some certainty, however, is there is huge disruption amongst businesses at the moment and a significant amount of restructuring and redundancy programmes ongoing.

“Our Insolvency and Restructuring team has never been busier. I think it’s possible that this upheaval within business is the root cause of these complaints.”

There were also more than 5,000 working time directive complaints, which occur when an employee is aggrieved to be working over the legal limit of 48 hours a week on average. Individuals may opt out of this limit.

Claims in Employment Tribunals can be classified into either single or multiple claims. Single claims are made by a sole employee/worker, relating to alleged breaches of employment rights. Multiple claims are where two or more people bring proceedings arising out of the same facts, usually against a common employer.

Multiple claims in 2022/23 were at their second lowest over the last 10 years, as a percentage of total claims.

Awards

The median awards for different types of claims for 2021/2022 were (the latest figures available):

Unfair dismissal £7,650

Race discrimination £14,120

Sex discrimination £17,959

Disability discrimination £14,000

Religious/belief discrimination £25,968

Sexual orientation discrimination £28,384

Age discrimination £12,480

How an employer can avoid an Employment Tribunal

Tim said businesses should be seeking to avoid Employment Tribunals, which are costly and potentially reputationally damaging.

He said mediation was a key tool in preventing court proceedings.

“Mediation should be the first port of call for any business facing tribunal action,” he said.

“Utilising the skills of a third party can help to find solutions that everyone can agree on. It helps to improve communication and allows everyone involved to have control of final agreements.

“The majority of disputes can be resolved before court.”

Tim said disputes can be avoided in the first place by having clearly written policies and procedures where matters need to be dealt with formally.

“These should be communicated with staff to ensure they fully understand them follow them consistently when the need arises.”

Proposed reforms to the civil justice system could see mandatory mediation introduced in claims of under £10,000.

“The argument against has long been that you can’t force people into mediation but I believe it would speed up claims and clear the backlog considerably,” said Tim.

When to speak to a lawyer

“It’s important a business speaks to a legal professional as soon as an allegation of an employment law breach surfaces,” said Tim. “Business leaders often believe they can resolve the issue themselves and make decisions that can exacerbate the situation.

 “At Higgs, we primarily advise businesses – right from PLCs to SMEs – and our number one aim is to always mediate or settle outside of the court room, which is in everyone’s interest.”