Facing an Employment Tribunal Claim can expose employers to significant financial, reputational, and operational risk. In this article, we explore the common types of tribunal claims brought against employers, the associated legal and commercial risks, and critically, the steps you can take to protect your organisation.
What is an Employment Tribunal Claim?
An employment tribunal claim is a formal legal action brought by an employee or former employee against their employer. Claims arise when an individual believes they have been treated unlawfully, such as in cases of unfair dismissal, discrimination under the Equality Act 2010, or unlawful deductions from wages.
The importance of following fair procedure was emphasised in Polkey v AE Dayton Services Ltd (1987), where the House of Lords confirmed that even if a dismissal might have been substantively justified, failure to follow a fair process could still render it unfair. At the same time, the case recognised that if the outcome would have been the same if fair procedure was followed, compensation can be reduced up to 100%.
Similarly, in British Home Stores Ltd v Burchell (1978), the tribunal set out the test for fairness in misconduct dismissals, requiring employers to show they had a genuine belief in the employee’s misconduct, based on reasonable investigation. These cases highlight that both substance and process are critical in defending claims.
Employees generally have three months less one day from the date of the alleged incident (such as dismissal or discriminatory act) to lodge a claim, although some exceptions apply, for example redundancy payment disputes, which allow six months.
How Does the Process Begin and Progress?
The process usually starts with Acas Early Conciliation, which is mandatory before a claim can be lodged. If conciliation fails, the employee submits an ET1 claim form.
The employer must then respond with an ET3 Grounds of Resistance, this is the formal document setting out the basis on which the employer resists the claim.
From there, the case may proceed to preliminary hearings, disclosure of evidence, and ultimately a final hearing where a tribunal panel delivers its judgment.
Common Types of Claims Employers Face
- Unfair dismissal
- Discrimination (sex, race, disability, age, religion, sexual orientation, pregnancy/maternity)
- Redundancy disputes and selection challenges
- Equal pay claims
- Breach of contract (e.g., notice pay disputes)
- Whistleblowing detriment
- Unlawful deductions from wages
- Failure to provide written terms of employment
- Holiday pay disputes under the Working Time Regulations
Risks and Consequences for Employers
Financial Risks
Defending a claim can be expensive, with legal fees, compensation awards, and tribunal costs. Discrimination claims are particularly risky because compensation is uncapped.
In Vento v Chief Constable of West Yorkshire Police (2003), the courts set out “Vento bands” for injury to feelings awards. These include lower, middle, and upper bands depending on severity and in the most exceptional cases the court can award in excess of £60,700. This framework shows how even relatively minor disputes can lead to significant financial exposure.
Reputational Risks
Tribunal claims are public, and reputational damage can be severe, particularly in cases involving allegations of discrimination or harassment. Negative publicity can undermine trust among staff and external stakeholders, creating wider concerns about workplace culture. Importantly, even if an employer successfully defends a claim, tribunal judgments are published online and remain accessible.
The mere fact of being taken to tribunal can therefore harm reputation, as potential recruits, clients, and business partners may search tribunal records and form negative impressions. This can affect recruitment, retention and commercial relationships, meaning reputational risk exists regardless of the eventual outcome.
Operational Disruptions
Tribunal proceedings demand management time and resources, often diverting attention from business operations. Witnesses may be required to attend hearings, and workplace morale can suffer if employees perceive unfair treatment.
Legal Complexities and Compliance
Employment law is constantly evolving, and employers who fail to update policies risk exposure. Failure to follow fair process before dismissal or disciplinary action can result in automatic unfair dismissal findings. In discrimination claims, once an employee establishes facts suggesting discrimination, the burden shifts to the employer to prove otherwise, making compliance with fair procedures critical.
Strategies to Mitigate Risk
Employers can reduce risk by maintaining clear HR policies, documenting decisions, and ensuring contracts set out expectations. Manager training is vital, as front-line managers often handle disciplinary and grievance issues; poor handling can escalate disputes unnecessarily. A culture of fairness and transparency is the best preventative measure.
Responding Effectively to a Tribunal Claim
If faced with a claim, employers should act quickly. They should review the ET1 form, gather evidence, and submit a timely ET3 response.
Early settlement or mediation through Acas can often reduce costs and reputational harm compared to a full hearing. Seeking legal advice at the earliest opportunity is essential, as solicitors can assess risks, advise on settlement strategy, and ensure compliance with tribunal procedure.
Speak to an employment tribunal claim solicitor
Employment Tribunal Claims can escalate quickly, even in workplaces with strong HR processes. Prevention through sound policy, proactive training, and early legal advice is often more effective and less costly than defence.
If your business is facing a potential claim, or you want to safeguard your organisation by ensuring you have the correct procedures in place, our expert Employment Law team can help. We work in partnership with employers to deliver tailored, commercially astute legal solutions that reduce risk and protect reputation.
For strategic support with Employment Tribunal Claims or broader employment law issues, get in touch with our partner-led team today.
Key Contact
Paul Hennity
Employment Law Partner
Paul is a Partner in our Employment Law team, currently dividing his time between our Chester and Wirral offices.
