Employment tribunal – What to expect and how to avoid it

Employment tribunals are scary; they are expensive, they have the potential to harm your business, tarnish your reputation and will undoubtedly keep you awake at night.  The unexpected nature of employment tribunals makes it that bit worse. You won’t know what to expect.  If you’re a typical entrepreneur, you will likely err on the optimistic side and think whatever the issue – “it’ll never get that far”.

Sometimes it does get that far. This article answers three common questions small business owners ask our consultants explaining the process and the risks involved so you can be as prepared as possible.

1 – Will a claim always go to employment tribunal?

Not always, no. It depends how you and the employee manage ACAS Early Conciliation, the mediation service offered to businesses for free, either before or when an Employment Tribunal claim is submitted by an individual.

This service is now mandatory when any claims are made, and both you and the employee that has made the claim should attempt to come to a resolution prior to the tribunal. However, this is only if both parties agree to take part – essentially negating the fact that parties ‘have to’ participate by law.

This early conciliation is your opportunity as an employer to receive expert help and advice in settling a potential claim against you. Regardless of whether you think the employee is prepared to move towards a tribunal or not, it’s best to take the process seriously and try to reach a resolution.

It’s possible that receiving a letter to attend early conciliation could be the first you hear of any grievance against you. In this instance we recommend you should always take the time to hear the employee’s side and try to reach a sensible conclusion. ACAS are professional mediators who will work at no cost to your business, so it’s a very cost-effective way of resolving any disputes.

2 – How can I assess the risk of an employment tribunal claim to my business?

Assessing the risk of an employment tribunal claim to your business is all about getting an understanding of how you’ve managed the employee prior to this point.

First of all, it’s worth assessing what the dispute relates to. Awards for unfair dismissal are capped in law, however awards for discrimination claims, or dismissals for health and safety reasons are unlimited, therefore understanding the nature of the claim is critical.

Should you fail to follow ACAS’ code of practice on handling disciplinary and grievance issues, up to 25% can be added to the final award.  The code contains standard procedures about things like investigating issues promptly, acting consistently and giving the employer an opportunity to respond to evidence presented before a decision is made.  These should all be included as a minimum in your staff handbook policies.

Don’t forget to make notes of any conversations or meetings as soon as you can afterwards, and make sure your managers know to do this too.  With proper recording procedures, usually aided by online recording tools such as HR software, you should have sufficient evidence of how you managed any disputes internally. This can help you to understand how you or your managers could have made errors, or not.

If you have evidence that you’ve followed statutory procedure, this can lower the financial risk to your business when going to tribunal. If you haven’t got evidence of this, can you explain why?

Some might argue that even if you had followed ‘proper’ procedure, the outcome would have been exactly the same. However, this isn’t a sensible, or quick, fix. You will still face the basic award if you are found to have dismissed someone unfairly and only the compensation to the employee may be reduced. We’d certainly still suggest you try and follow procedure at all times, to reduce your risk.

If you don’t have evidence that you have followed the correct procedure, or feel your managers may have made an error, then you should consider getting advice from an employment lawyer or HR expert at an early stage, as you are likely to be found to be at fault and you may be best to settle the claim early to avoid the higher costs of a court hearing.

Of course, there are unavoidable risks when you fight a tribunal claim. If you don’t reach a settlement, not only could you face a financial penalty, but you will lose valuable time, and of course you may risk reputational damage too. So all in all, it really does pay to do things by the book.

3 – How can I stop staff making an employment tribunal claim?

The simple answer is that you can’t. You can do everything in your power to mitigate the risk of it happening by treating everyone that comes into contact with your company as an employee or a prospective employee fairly and reasonably.

It’s useful to know that if you have staff with over two years’ continuous employment, they have the ability to bring a claim of unfair dismissal against you. Normally, staff without two years’ continuous service cannot raise an unfair dismissal claim unless it is abundantly clear that you have been unfair. This can include dismissal for reasons of pregnancy, trade union membership, reporting Health & Safety breaches, or for whistleblowing.

It’s also important that you are aware that you could have a discrimination claim brought against you from a previous, existing, or potential employee regardless of their length of service.

For example, if you are recruiting for a role that includes working either on Saturday or Sunday but you fail to advertise it as such, and then you refuse an applicant because they cannot work on these days because they are religious holidays – you’re leaving yourself wide open to a discrimination claim. We use this example because it actually happened, and the employer lost the tribunal.

This not only highlights the need to treat people fairly but also to take care to have very clear job specifications and employment guidelines in writing from recruitment onwards.

It’s not enough to have clear employment policies, you must ensure you use these guidelines consistently, and fairly. Bending the rules for one employee, and not another, is a sure fire way to be accused of discrimination of some kind.

Additionally, employers are often guilty of under-estimating the extent of their duty to make adjustments for disabled employees and can fall foul of the law. You should always ensure that reasonable steps are taken to prevent a disabled person being at a disadvantage. This could include adjustments to policies, changes to the access at work, or provisions of auxiliary aids such as providing information in an accessible format such as Braille, large print or email.

Finally, if you should have any issues, try and deal with them internally, and without delay. Resolving a dispute with staff is never easy, but is certainly less stressful than going to tribunal.  Having a culture of encouraging staff to raise concerns early with their manager will help.   As mentioned, also following the ACAS Code of Practice can mean you avoid increasing any award by up to 25%– should you end up at tribunal, and lose.