How Much Does An Employment Tribunal Cost?

We are asked frequently by new clients “How much does an employment tribunal cost?“.  A typical employment tribunal in the UK in 2022 will cost an employer between £7,000 – £10,000 plus VAT.  Additionally, there will be other costs for the PHR (preliminary hearing review) and a barrister.   PHR costs could be around £2,500 plus VAT.  Barrister fees could be around £3,000 – £5,000 plus VAT.  This is, of course a very rough guide and depends entirely on the intricacies of the claim being made.  You will more than likely be responsible to cover your own costs even if you win a tribunal.  There are very occasional circumstances where you may be able to retrieve your costs from the claimant.  However, this will only be possible if they have acted unreasonably or have no grounds to bring a claim.

Are you prepared for being taken to tribunal?  If you aren’t being taken to tribunal yet, have you taken steps to avoid it in the first place?  Don’t despair!  We will guide you through the tribunal process.

How much does An employment tribunal cost the employee?

There are no up front fees for an employee to pay when making a claim against their employer.  They do, however run the risk of being responsible for the employers costs should they lose.  There will be some costs associated with an employment tribunal to the employee.  Such as solicitors fees, for preparing the case and representing them in court.  Dr’s fees could also need to be factored into costs if medical reports were to be required.  An employee will likely be required to cover their own costs of taking their employer to tribunal even if they win.

What is an employment tribunal and why do they happen?

Dismissing employees is a process most businesses will have to face at some point.  Ensuring you are following correct procedures is very important to remain within the lines of the law and ultimately, protect your business against claims.  A tribunal can be brought against any business, it doesn’t necessarily mean you have been a bad employer or that you have done anything terribly wrong. Tribunal proceedings are stressful for all involved, no matter the size of your business, tribunals tend to be long, drawn out affairs which take up valuable business hours.  It is very hard to get all the processes right when dismissing an employee so its very important to ensure you know exactly where you stand before dismissing an employee.

If you have already dismissed an employee and are threatened with an employment tribunal claim, you will still need to defend your case.  The sooner you take advice the better prepared you will be.  Most tribunal claims are complex therefore having legal representation rather than representing yourself will give you the best chances of success.

I’m being take to court.  What do I do first?

As soon as an employment tribunal lands on your desk the costs start to mount as you begin to prepare your defence.  Not only the monetary costs but also the costs of time is a big factor.  Time is needed to reply to the employee, time to read and absorb all documents related to the claim, time to interview all employees who may be witnesses, time to draft and submit your response.  With all this time required and the day to day work of the businesses also needing to be done, this adds stress to often already stretched HR departments or whoever in the business has taken on the HR responsibilities as an addition to their usual role.  It is highly advisable to have legal support for an employment tribunal to draft your best defence but also to alleviate some of these time pressures and stress.

Timeline for employment tribunal

The tribunal timelines state that a claim must be started within 3 months minus 1 day of dismissal or resignation.  The timeline for an employment tribunal is as follows

• The employee will take their claim to ACAS.  They will set out the reasons for their claim.
• ACAS will then contact the employer (in most cases*).
• Early Conciliation – ACAS will operate as mediators between both employee and employer, neither party needs to take part in early conciliation.  ACAS will try to help both parties come to an amicable agreement before the claim goes to court.  There are time constraints on this.  The employee needs to have their claim started within 3 months minus 1 day from employment ending or, if still employed, from the date of the issue happening.
• The employee will receive an ACAS certificate and will then issue ET1 (employment tribunal form) to employer.  The ET1 form will formally outline the reasons for the tribunal.
• The employer then has 28 days to respond with an ET3 form.  The ET3 form will detail the defence.  Attached to this form will be the “grounds of resistance”.  This is the employers version of events which will explain why the claim is being defended and why the claim will fail.  This will be submitted through an online portal or emailed straight to the tribunal.
• The tribunal will send the ET3 form to both the claimant and ACAS.
• Strikeout is a possibility at this point.  This will affect only a very low percentage of claims.  The employer would have to put in an application for this to happen.  This could happen if the claimant is out of time or if it has been found the claimant has been dishonest.

How long will it take?

It is difficult to put a time on these things.  It all depends on each individual case.  But most cases will be wrapped up within about 6-8 months for an unfair dismissal or other straightforward issues.  Whereas, discrimination or whistleblowing or anything more complex, expect timescales of 12-18 months.

We had one client recently whose tribunal went on for 4 years.  Their legal fees were in excess of £120,000.  Just in case you’re wondering, our client won!

What happens between ET3 and the final hearing?

If it’s a straight forward claim there is no preliminary hearing.  The tribunal will send dates to complete actions.

1st date – Document exchange.

2nd date – The tribunal bundle is put together.  This is the file which is referred to at tribunal.  This document is page numbered and indexed.

3rd date – Exchange of witness statements.  All witness statements are written out and submitted before the hearing.

The employment tribunal hearing

• The hearing in court could last 1-3 days for an unfair dismissal or for discrimination 1-2 weeks.
• You will bring with you the bundle of documents as detailed above and also the witness statements.
• Everything is pre disclosed and agreed.  No new evidence can be brought up during the proceedings.

The most common reasons employment tribunals are brought against an employer are

• Discrimination
• Unfair dismissal
• Contract breach
• Redundancy pay
• Working hours
• Unauthorised deductions from pay
• Failure to inform and consult in the event of TUPE or redundancies
• Equal pay
• Working hours

I have received an ET1 form.  What do I do next?

You need to go looking for anything that might be relevant to the case.

You have disclosure obligations.  You must produce any evidence which is relevant.  Whether it is helpful or damaging to your case.

Put everything into date order.  Ensure documents are put together in a manner that is easily copied, sorted through and read.  Make these documents tell the best possible story of the events leading up to the claim.  At this point, if you haven’t already, you may want to look at taking some advice.  The more care you take sorting these documents the less you will end up paying your solicitor.  Taking time to gather these documents could save you around £2,000 compared to leaving these documents for your solicitor to sort through.

What is a cost warning?

Although both parties usually will pay their own costs related for an employment tribunal.  Occasionally employers will issue a cost warning letter to the employee through the employment tribunal.  This letter will warn the employee that they may pursue them for costs should they continue with the claim.   A cost warning can be issued at any point during an employment tribunal.  An employer may issue a cost warning should the employee act unreasonably or if the case has no chance of success.  The deadline for issuing a cost warning is within 28 days from the judgement being made.

How can you avoid being taken to employment tribunal?

As previously explained, employment tribunals are costly processes to go through.  Taking steps to avoid them in the first place is best practice.

Contract of employment – Ensure the contracts are fit for purpose and specific to the sector your business operates in.  Don’t take a short cut.  Free contracts found on the internet, are unlikely to cover all aspects of your business sufficiently.  They will not provide adequate protection.

Policies – Policies give clear operational guidelines for all involved in the business.  All major aspects of how employees and employers should act within the workplace are defined within these documents.  A clear set of expectations alleviates future misunderstanding.

Advice – Take advice early. Knowing there are problems brewing and taking preventative or restorative remedial action quickly is your best line of defence against the risk of tribunal.  Having an employment law solicitor on hand to answer questions and offer guidance in real-time is a valuable resource.

Summary

In Summary, “How much does an employment tribunal cost?”  is a tricky one to answer!  Employment tribunals can be brought by anyone at any time.  Most businesses will experience them at some point.  Tribunals can be stressful, time consuming and expensive.  As soon as an employment tribunal lands at your desk you should,

• take legal advice,
• take an objective view,
• preparation is key!

Do you need help defending an employment tribunal?  Contact HR Anchor now for your complimentary initial assessment.

Prevention is better than a cure!

We would always suggest to take steps to avoid a tribunal in the first place.  We can help you protect your businesses with our highly competitive monthly retainer packages tailored to your individual business needs.  Contact HR Anchor today for your FREE initial workforce assessment.

A little tip from us.  It is always less expensive to position your business in the best possible way to avoid an employment tribunal rather than waiting until you have been issued with an ET1 (employment tribunal claim form).

Life is filled with unexpected surprises and these can affect the workplace in both positive and negative ways. This is exactly why every business needs to have robust processes in place to protect your business.

How much does an employment tribunal cost?  Is one of a few information pieces surrounding employment tribunals you can find on our website.  The links below show more information surrounding this topic.