An employment tribunal is a specialist judicial body that resolves disputes between employers and employees or, in some cases, workers and contractors — about rights arising from employment law. They are not ordinary civil courts. They exist solely to hear employment disputes, and the judges and panel members who sit in them have specific expertise in that field. If you've never faced one before, the process can feel alien. If you have, you'll know it pays to be well prepared.
Tribunal proceedings are governed primarily by the Employment Tribunals Act 1996 and the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. The day-to-day rules — how claims are managed, how hearings run, what the parties must do — sit in the Schedule to those Regulations, commonly called the 'ET Rules'. Employment judges are legally qualified and sit either alone or with two non-legal panel members drawn from employer and employee representative bodies.
Unlike the county court or High Court, employment tribunals have no general jurisdiction over contract disputes unless a claim is brought alongside a statutory complaint. They cannot, for example, hear a straightforward debt claim. What they can do is award compensation, make reinstatement or re-engagement orders, and — in discrimination cases — declare that a respondent has infringed a claimant's rights under the Equality Act 2010.
The table below sets out the most frequently encountered claim types in the employment tribunal, together with the relevant statutory basis and the current compensation range. Note that discrimination claims carry no upper cap on the compensatory element.
| Claim Type | Statutory Basis | Compensation Range (2026) |
| Unfair Dismissal | Employment Rights Act 1996, ss.94–134A |
Basic: up to £21,000 Compensatory: up to £115,115 |
| Wrongful Dismissal |
Employment Rights Act 1996, s.86; common law |
Notice pay owed (uncapped in contract claims) |
| Unlawful Deduction from Wages |
Employment Rights Act 1996, ss.13–27 | Sum unlawfully deducted |
| Discrimination (all protected characteristics) |
Equality Act 2010, ss.13, 15, 19, 26, 27 | Uncapped — includes injury to feelings |
| Automatic Unfair Dismissal (whistleblowing, TUPE, etc.) |
ERA 1996, s.103A; TUPE Regs 2006 | Compensatory award uncapped in some cases |
| Redundancy Pay | Employment Rights Act 1996, ss.135–181 | Statutory calculation up to £21,000 |
| Breach of Contract | Employment Tribunals Extension of Jurisdiction Order 1994 | Up to £25,000 |
| Working Time Breaches | Working Time Regulations 1998 | Compensation for detriment; right to unpaid leave |
The tribunal system is designed, at least in theory, to be more accessible than the civil courts. There are no court fees for claimants (since the Supreme Court struck down fees in R (Unison) v Lord Chancellor [2017] UKSC 51). Hearings are generally open to the public. The rules of evidence are more relaxed than in the High Court — tribunals can admit hearsay, for example, though they will consider its weight carefully.
One practical difference that catches employers out: tribunals are generally not costs-following. In the civil courts, the losing party normally pays the winner's legal costs. In employment tribunals, costs orders are the exception, not the rule. Even if you win comprehensively, you will usually bear your own legal costs. That changes the commercial calculation significantly — more on this in the section on costs and awards.
Before a claimant can lodge a tribunal claim, they must first contact ACAS to attempt early conciliation. This has been a mandatory requirement since May 2014, under the Employment Tribunals Act 1996, s.18A. An ACAS conciliation officer will contact both parties and, if both agree, will facilitate discussions to try to reach a settlement without the need for formal proceedings.
The process is entirely free of charge. It is also confidential — anything said during early conciliation cannot be disclosed in tribunal proceedings. That confidentiality is worth taking seriously: it gives both sides a genuine opportunity to speak candidly about what they want and what they might accept, without fear that an admission or offer will be used against them.
The claimant contacts ACAS, who issue an early conciliation certificate number. From that point, the claimant's limitation clock is paused for a period (the 'extension period') — initially one calendar month, extendable by a further two weeks if both parties agree. If settlement is not reached, ACAS issues a COT3 certificate, and the claimant can then proceed to tribunal. The limitation period clock restarts on receipt of the certificate.
Early Conciliation — Key Points for Employers
• You are not obliged to engage, but refusing to do so without good reason may be taken into
account if there is a later application for a costs order.
• ACAS conciliation is without prejudice — offers made during the process cannot be disclosed in the tribunal without both parties' consent.
• If settlement is reached, it is recorded on a COT3 form, which is legally binding and can be
enforced in court.
• You can settle some claims (e.g. wages) but not statutory rights (e.g. unfair dismissal) without either a COT3 or a Compromise Agreement (now called a Settlement Agreement).
A COT3 is the settlement agreement used when ACAS has been involved in conciliation. It is binding and conclusive — once signed, the employee cannot bring a tribunal claim on the matters settled. Unlike a settlement agreement under s.203 ERA 1996 (which requires the employee to have received independent legal advice), a COT3 does not require any such formality. That makes it faster and cheaper to conclude. The ACAS conciliation officer prepares the document and both parties simply agree the terms.
From an employer's perspective, getting a well-drafted COT3 with a clear 'full and final' settlement clause covering all potential claims is essential. Be careful about relying on generic wording — if you miss a specific claim, it may not be settled. Take advice if the sums involved are significant.
Time limits are one of the most technically significant aspects of tribunal litigation — and one where the rules are changing. Historically, most claims had to be brought within three months of the act complained of. The Employment Rights Act 2025 extends many of those primary limitation periods from three months to six months.
The Employment Rights Act 2025 extends the primary limitation period for unfair dismissal, unlawful deduction from wages, and a number of other statutory claims from three months to six months. This means employees will have longer to bring claims — and longer to gather evidence and take advice before doing so. Employers should not assume that just because a dismissal or deduction happened some time ago the matter has gone away.
The limitation period runs from the 'effective date of termination' (for dismissal claims) or the 'date of the act complained of' for other claims. Identifying this date correctly is critical. For a dismissal with notice, time runs from the date notice expires, not the date notice is given. For a constructive dismissal, it runs from the date the employee resigned but where a series of acts is alleged, time may run from the last act in the series under the 'continuing act' doctrine.
In discrimination cases, a tribunal has a broader discretion to extend time where it is 'just and equitable' to do so — a much more flexible test than the equivalent for unfair dismissal claims. That means discrimination claims brought outside the primary time limit are not automatically lost: tribunals regularly extend time if there is a good reason for the delay.
For unfair dismissal and most other statutory claims (other than discrimination), a tribunal can extend the limitation period if it was 'not reasonably practicable' for the claimant to have presented the claim in time, and the claim was then presented within such further period as is reasonable. The test is strict: ignorance of the legal time limit is generally not sufficient. However, circumstances such as serious illness, failure to receive a dismissal letter, or being given incorrect information by the employer have succeeded.
Time Limit Summary (Post-Employment Rights Act 2025)
• Unfair dismissal: 6 months from effective date of termination
• Unlawful deduction from wages: 6 months from the deduction (or last in a series)
• Discrimination: 3 months + just and equitable extension (unchanged)
• Equal pay: 6 months from the end of employment
• Breach of contract: 3 months from the act (3 years if in county court instead)
• Redundancy pay: 6 months from relevant date
The practical implication of extended time limits is that you should preserve documents and records for longer. A disciplinary outcome that happened four months ago may still generate a claim. Good record-keeping is your first line of defence.
The ET1 is the claim form. When a claimant submits a claim to the tribunal, the tribunal service will send a copy to you (the respondent) along with a response pack. This usually arrives by email or post within a few days. Don't ignore it, and don't assume it will resolve itself. Your first reaction matters.
Read the ET1 carefully. It sets out the claimant's case: the type of claim, the facts they are relying on, the remedy they are seeking. The factual narrative will not always be accurate — sometimes it will be significantly one-sided or contain errors but you need to understand the case being made before you can respond to it effectively. Make a note of the claim number. All future correspondence with the tribunal will need it.
CRITICAL: The 28-Day Response Deadline
You have 28 days from the date the ET1 is sent to you (not the date you receive it) to submit your response on Form ET3. If you miss this deadline, the tribunal can issue a default judgment against you without hearing your side of the story. Extensions can be granted, but only in exceptional circumstances and you must apply promptly. Do not let the form sit in an inbox.
The ET3 response form is your formal opportunity to state your defence. It asks whether you contest the claim, and if so, on what basis. You should set out the key facts from your perspective clearly but without excessive detail — the detailed witness evidence comes later. The ET3 should be consistent with what your witnesses will say, and consistent with the documents. Contradictions between your ET3 and your witness evidence are one of the things a claimant's representative will look for during the hearing.
Even if you think the claim is hopeless, submit an ET3. A blank response or no response at all is treated as an admission. If the sums involved are modest and you intend to settle, you can still file a brief response contesting the claim while negotiations continue — that preserves your position and keeps your options open.
Many employers, especially when facing a claim they believe is entirely without merit, are tempted to treat the process casually. That is a mistake. Even weak claims require resource to defend — management time, legal fees, disclosure exercises, witness preparation. A tribunal can find against you even where the odds appeared strongly in your favour if the documentation is poor or witnesses perform badly under cross-examination. The cost of getting it wrong can be substantial.
Once an ET3 is submitted, the claim moves into active case management. The tribunal will typically issue a 'case management order' setting out what each party needs to do and by when. Following the amended ET Rules, preliminary hearings and final hearings are the two main types of hearing. Preliminary hearings deal with case management issues, disputed preliminary points (such as whether a claimant is an 'employee' or whether the claim is in time), and applications for strike-out or deposit orders.
Both parties will normally be ordered to exchange 'lists of documents' — a schedule of all documents relevant to the issues. This is followed by inspection and the preparation of an agreed bundle. Unlike in the High Court, there is no formal discovery process with inspection of opponent documents — the tribunal relies on voluntary disclosure and candour. That said, a tribunal can order specific disclosure, and failing to disclose a relevant document when ordered to do so is a serious matter.
Be methodical about disclosure. Start by preserving all relevant emails, letters, performance records, disciplinary notes, and internal communications as soon as a claim is intimated. This includes Slack and WhatsApp messages — informal communications between managers about the claimant can be highly significant. If a document is adverse to your case and relevant, you are still obliged to include it. The temptation to omit inconvenient documents must be resisted: tribunals take a very dim view of deliberate non-disclosure, and it can be fatal to your credibility.
Witness statements stand as the witnesses' evidence-in-chief. Each witness sets out their account in their own statement, which is filed and exchanged before the hearing. At the hearing, the witness confirms their statement and is then cross-examined by the other side. The quality of witness statements and the performance of your witnesses under cross-examination — is often decisive.
Good witness statements are chronological, factual, and closely referenced to the documents in the bundle. They do not contain legal argument, opinion, or speculation. They explain why decisions were made, in the witness's own words. Prepare your witnesses properly: brief them on the process, take them through the documents, and run a practice cross-examination. An unprepared witness who comes across as evasive or inconsistent can lose an otherwise strong case.
Final hearings are listed by reference to how long the case is expected to take — anything from a single day to several weeks in complex discrimination claims. The claimant usually presents their case first. The judge and panel members are expected to read the bundle in advance and will often ask questions directly. Cross-examination can be robust; witnesses must answer honestly even when questions are uncomfortable.
After the evidence, each party makes closing submissions (either orally or in writing). The tribunal then deliberates and either gives a decision immediately or reserves it for a written judgment at a later date. Reserved judgments can take weeks or months. All judgments are published on the GOV.UK employment tribunal decisions database — they are public documents.
Understanding what a tribunal can actually order is essential when assessing your exposure and deciding how to respond. Compensation is by far the most common remedy — reinstatement and re-engagement are awarded only rarely, and usually only where the relationship has not entirely broken down.
An unfair dismissal award has two components. The basic award is calculated in the same way as a statutory redundancy payment — by reference to the employee's age, length of service, and weekly pay. The week's pay cap is currently £700, and the maximum basic award is £21,000 (for employees with 20 years' service, all at the upper weekly rate). The compensatory award reflects the claimant's actual financial loss — lost wages, loss of future employment, loss of statutory rights, and pension loss — subject to a statutory cap of £115,115 (the lower of one year's pay or the statutory cap).
2026 Unfair Dismissal Compensation Caps
• Week's pay cap: £700
• Maximum basic award: £21,000 (20 years' service × 1.5 × £700)
• Compensatory award cap: £115,115 (or 52 weeks' gross pay, whichever is lower)
• Maximum total unfair dismissal award: £136,115
Unlike unfair dismissal, compensation in discrimination claims under the Equality Act 2010 is entirely uncapped. The award compensates for financial loss — in the same way as unfair dismissal — but also includes 'injury to feelings', which reflects the impact of the discriminatory treatment on the individual. The Vento bands, updated periodically, set the brackets for injury to feelings awards: as of 2026, the upper Vento band covers the most serious cases and can reach £56,000 or more. In egregious cases, personal injury awards and aggravated damages can also be made. The combined effect can be very significant.
Whistleblowing (automatically unfair dismissal under s.103A ERA 1996) is similarly uncapped on the compensatory element, and the basic award cannot be reduced for contributory fault. Automatic unfair dismissal in a TUPE context or for trade union activities also carries a higher minimum basic award — currently £8,533.
As noted earlier, employment tribunals do not routinely order the losing party to pay the winner's costs. However, they can do so — and will — where a party has acted 'vexatiously, abusively, disruptively or otherwise unreasonably', or where a claim or response had no reasonable prospect of success. The maximum costs order a tribunal can make without assessment is £20,000; above that, the matter must go to a costs assessment hearing.
Preparation time orders (PTOs) are available where a party is unrepresented, based on the number of hours spent preparing the case at a prescribed hourly rate. Wasted costs orders can also be made against legal representatives (not just parties) where they act improperly or negligently. If a claimant has rejected a reasonable settlement offer and obtained no better outcome at tribunal, that is a factor a tribunal can take into account on costs — though it does not automatically trigger a costs order.
Failing to Respond — The Consequences
If you do not submit an ET3 response within 28 days, the tribunal will make a default judgment
against you. This means the tribunal will decide the outcome — and potentially the remedy —
without hearing from you. A default judgment can be set aside, but only if you apply promptly and have a reasonable explanation. Even then, there is no guarantee. In discrimination cases, a default judgment can result in an uncapped award. The 28-day deadline is absolute. Do not miss it.
Settlement is available at every stage of tribunal proceedings, from the moment a claim is issued right up to the moment a judgment is handed down. Many cases that reach the tribunal door settle at the last minute, sometimes minutes before the hearing begins. Understanding your settlement options and when to use them is as important as knowing how to fight a case.
Employment tribunals offer a judicial mediation service, presided over by an employment judge sitting in a non-judicial capacity. Both parties must agree to participate. The mediator will meet the parties separately and together, exploring what each side wants and where there is room to settle. It is confidential and without prejudice. If it fails, the same judge will not normally hear the final case. Judicial mediation works best where both parties have a genuine interest in settlement and where the relationship (or its ending) has emotional as well as financial dimensions.
ACAS conciliation officers remain available throughout the life of a tribunal claim — not just during early conciliation. Their involvement during proceedings is called 'in-case conciliation'. They can facilitate negotiations, help the parties find common ground, and record any settlement on a COT3. As with early conciliation, this is free of charge and confidential.
Settlement at the door of the tribunal — literally, in the waiting area before the hearing commences — is common. It often happens because both sides, having seen the final witness statements and the agreed bundle, take a more realistic view of their respective prospects. The pressure of imminent proceedings concentrates minds wonderfully. If you are going to settle, be clear about what you are settling and get the terms in writing, even if informally. A scribbled agreement on notepaper, signed by both parties, can be binding.
There are two ways to formally settle a tribunal claim. A COT3 is prepared by ACAS following their conciliation and does not require the employee to take independent legal advice. A settlement agreement (under s.203 ERA 1996) is a contract between employer and employee under which the employee waives specified statutory claims in return for a payment. For a settlement agreement to be valid, the employee must have received independent legal advice from a qualified adviser (usually a solicitor), and the agreement must identify the specific claims being settled.
COT3 vs Settlement Agreement At a Glance
• COT3: requires ACAS involvement; no need for employee's independent legal advice; can be
concluded quickly; binding on all matters agreed.
• Settlement Agreement: can be used without ACAS; employee must have independent legal advice;
must identify specific claims; employer usually contributes to the employee's legal costs.
• Both are binding and prevent the employee from bringing tribunal claims on the matters settled.
• Neither can validly exclude claims for future acts — e.g. a future personal injury arising from an existing condition.
Most tribunal claims are preventable. Many that do proceed would have been easier or cheaper to resolve if the employer had acted differently at an earlier stage. Here is what experienced employment practitioners know, distilled into eight practical points.
The moment you receive a grievance, an ACAS notification, or an ET1, put a document preservation hold in place. That means telling the relevant managers not to delete emails, messages, or files connected with the matter. Documents that are deleted after proceedings are anticipated can give rise to an adverse inference the tribunal may conclude that the deleted material would have been damaging to your case. It is also potentially contempt of court once proceedings are formally underway.
The cost of getting employment law advice at the outset — when you are considering a dismissal or during a disciplinary process — is almost always lower than the cost of defending a claim after the event. A solicitor can identify risks you have not anticipated, suggest ways to protect your position, and advise on the strength of your process. If the claim does proceed, having an advice trail also demonstrates that you acted reasonably and in good faith.
Cross-examination is often where cases are won or lost. A witness who clearly remembers events, who is consistent with the documents, and who comes across as honest and reasonable will make a good impression even on difficult questions. A witness who is evasive, who contradicts their statement, or who appears defensive and unwilling to acknowledge any shortcomings can undermine even a technically strong defence. Preparation is not coaching — it is making sure your witnesses know the bundle, understand the process, and have thought through the difficult questions they will face.
Deciding whether to fight a case or settle it should be a commercial decision, not an emotional one. Work out what it will cost to defend the claim to a hearing — legal fees, management time, and the opportunity cost of your key people spending time on witness statements and tribunal attendance rather than running the business. Then estimate the realistic range of outcomes if you lose. Compare that to the cost of settlement.
Sometimes the principle matters and it is right to fight. But be honest with yourself about why. 'We want to send a message' is not, on its own, sufficient justification for spending tens of thousands of pounds on litigation — especially when, even if you win, you will normally bear your own legal costs. A pragmatic settlement is not an admission of wrongdoing. Most well-managed businesses settle some claims even where they believe their position to be correct.
The majority of unfair dismissal cases turn on whether the employer followed a fair procedure as well as having a potentially fair reason for dismissal (under s.98 ERA 1996). A fair reason without a fair procedure is still likely to be unfair. Use the ACAS Code of Practice on Disciplinary and Grievance Procedures as your benchmark — failure to follow it can result in a 25% uplift on any compensatory award, while following it to the letter will not automatically save you, but it gives you the strongest possible foundation.
Contemporaneous written records are your best evidence. A disciplinary outcome letter that clearly sets out the findings and reasoning is far more persuasive than a manager trying to reconstruct their decision-making 18 months later in a witness statement. Record meetings (with the employee's knowledge), keep notes of one-to-ones, and document performance concerns as they arise rather than in a rush once a dispute has crystallised.
Not every individual who works for you is an 'employee'. Some will be 'workers' — with a more limited set of statutory rights — and some will be genuinely self-employed contractors. The distinction matters: unfair dismissal rights, for example, are only available to employees, but unlawful deduction from wages and working time rights apply to workers too. Be careful about assuming that someone labelled a 'contractor' in their contract is treated as such by a tribunal — the label is not determinative. The tribunal will look at the reality of the working arrangements.
Refusing to engage with ACAS conciliation or mediation without good reason is rarely good tactics. A tribunal cannot compel you to settle, but an unexplained refusal to engage in any form of alternative dispute resolution can influence a costs decision if the case subsequently goes against you. More practically: a genuinely open discussion, with an experienced ACAS officer facilitating, sometimes resolves matters at a fraction of the cost of full proceedings. Keep an open mind.
Note on Record-Keeping and the Employment Rights Act 2025
With time limits extending to six months under the Employment Rights Act 2025, you need to retain employment records, disciplinary files, and correspondence for longer than many businesses currently do. A claim filed five months after a dismissal is just as valid as one filed in the first month. Ensure your data retention policies reflect the new landscape and do not delete relevant records simply because a few months have passed without incident.
If you require assistance with your employment law or tribunal claims against you as an employer our experts are always on hand to support by scheduling a call below: