This is made even more concerning by the news that employment tribunal cases have seen year-on-year record highs since 2022. When comparing January to March 2024 to the same time last year, the Ministry of Justice has reported an increase in employment tribunal receipts and open cases by 8% and 9% respectively.

The main takeaway from this is that more employment tribunal cases than ever are being recognised as valid.

With this trend showing no sign of slowing, it’s more important than ever that businesses are fully prepared to handle tribunals – understanding how best to avoid them, how to mitigate losses, and the correct legal procedure if a business finds themselves handed a claim.

We have recruited legal advice from Lisa Branker, Head of Employment and HR at employment law specialists Beecham Peacock Solicitors, for her expert advice on preparing and dealing with an employment tribunal.

What is an employment tribunal case?

An employment tribunal is a legal body in the UK, responsible for hearing claims from employees who believe they have been treated unlawfully. Tribunals cover cases such as unfair dismissal, discrimination, pay deductions, and more.

These tribunals are independent and enforce decisions in legal disputes concerning employment law. When a claim is made against an employer, they will initially be contacted by the Advisory, Conciliation and Arbitration Service (ACAS).  ACAS offers to work with the parties to solve a dispute without going to a tribunal.

Preventative measures to avoid employment tribunals

“The first step to avoiding tribunal claims is having employment contracts in place. Employers should also have staff handbooks containing all of the company’s policies and procedures. These policies and procedures should be communicated to your staff,” explains Branker. “They should also be regularly updated as the law evolves constantly, so it’s important that businesses review and update their practices in accordance with change. This can be done with regular audits, pay equity reviews and culture assessments.

“However, it’s not just about sound legal documentation,” Branker adds. “It’s also about fostering a positive workplace culture which works for both employer and employee. Understanding, helpful and collaborative communication should be practised by all in management roles, helping to avoid potential grievances being raised by employees.”

How to prepare for an employment tribunal

“When an employee issues a claim against you in the employment tribunal, you will receive a copy of the tribunal claim form – this is called an ET1.  Your first and most crucial step is to carefully review the ET1,” Branker explains. “A robust review of the claim will help a business identify the allegations made by the employee and allow the employer to collect all relevant documentation in support of its defence.

“The formal response to the ET1 is known as the ET3. This form will be the basis of the defence. The employer is legally required to submit the ET3 within 28 days of receiving the ET1, and the ET3 should always be written in collaboration with a solicitor,” Branker suggests. “It is important to rely on the expertise of an employment solicitor here, as the business will be required to either admit to the claims being made against it or deny them – outlining their defence. A solicitor will be crucial in making sure the defence is accurate, comprehensive and strong.”

“Alternatively, this is the time when a business should consider ending the dispute early through an alternative dispute resolution (ADR),” Branker says. “There are many types of ADR that should be considered, including arbitration, mediation, negotiation, and conciliation.”

Different types of alternative dispute resolutions

Arbitration: the formal resolution of a dispute through an impartial third party – an arbitrator. The arbitrator is appointed and tasked with listening to both sides, reviewing the evidence given and making a binding decision. This resolution is handled privately outside the courtroom and is quicker and more efficient than a tribunal.

Mediation: a voluntary, informal process handled by a neutral third party – the mediator. The mediator helps to bring the parties together to find a mutually acceptable resolution to the dispute, protecting both from seeing the inside of a courtroom.

Negotiation: when both the claimant and defendant communicate directly to resolve a dispute and avoid a lengthy, expensive legal process such as a tribunal. This can be an effective and efficient way of avoiding a tribunal but relies heavily on healthy communication between both parties. Depending on the nature of the relationship between employer and employee, this may not be possible.

Conciliation: a process in which a conciliator works with both claimant and defendant to reach a settlement before a dispute reaches an official tribunal.  Most of the time, an employee must go through early conciliation via ACAS before claiming an employment tribunal.

How expensive are employment tribunals?

“Employment tribunals can become very expensive but vary depending on the length and complexity of the case,” Branker explains. “One cost to consider apart from legal fees is the cost to the business in gathering and preparing evidence and spending work hours prepping for the tribunal. These are indirect costs which will affect the operations of a business, impacting revenue.

“The varying costs of tribunals can leave many businesses in the dark, unsure of the full extent the tribunal process will have on the business’ finances,” Branker continues. “This is a big reason as to why many opt for an ADR, ending the dispute with a confirmed settlement which can be financially accounted for.”

Avoiding future tribunals

“Employment tribunals are an emotionally draining, expensive and tiresome process – which is why it is important to learn from the experience and put measures in place to prevent future tribunals where they are avoidable,” says Branker.

“First, conduct a thorough review into the circumstances which led to the employee's tribunal claim – addressing them internally and preventing a similar issue from arising in the future.

“Secondly, it is important to make thorough notes and record how you dealt with the tribunal claim – including areas where a different outcome may have been desirable. If, in hindsight, an ADR would have been less costly and more efficient, make a note of it.

“Finally, work on correcting instances of workplace culture if this contributed to the employee’s tribunal claim. Happier employees are less likely to take legal action against their employer and typically work harder if  they are being cared for.”

As with any legal matter regarding the workplace, it is crucial that businesses follow the latest legal requirements and advice. If you find yourself in the unfortunate position of receiving an employment tribunal claim, seek legal advice immediately.