My company is facing an Employments Tribunal Action – what now?

My company is facing an Employments Tribunal Action – what now?

If efforts to resolve a workplace dispute prove unsuccessful, your employee has the option to bring the matter to an employment tribunal, where the rulings carry legal obligations. Entering into an employment tribunal is a significant matter that could lead to substantial financial penalties and potential reputational damage for your company, especially if the judgement is unfavourable.

Since February 2017, tribunal decisions have been publicly accessible online, and information about your company’s circumstances may circulate. So, what precisely is an employment tribunal, and what could have prompted your employee to pursue such action?

 

Employment ‘court’

An employment tribunal typically comprises a panel with three members: a legally qualified employment ‘judge’ and two lay members, one representing the employer and the other representing the employee.

The lay members possess experience in employment-related matters and are obligated to maintain impartiality when evaluating the facts of the case. While there are instances where the judge may preside alone, specific situations, such as cases involving discrimination, necessitate a full panel of three members.

 

Reasons why you might be facing an employment tribunal

In initiating their case, your employee is typically required to pay an employment tribunal fee, unless they earn a particularly low wage, in which case they may be eligible for financial assistance.

While this is not an exhaustive list, an employee may pursue an employment tribunal against you for reasons such as:

• Unfair or constructive dismissal
• An equal pay issue
• Non-compliance with redundancy legislation, which includes not providing redundancy pay and denying your employee time off to seek alternative employment.
• Working hours issues
• Breach of contract
• Deducting money from wages without the proper authorisation
• Breach of flexible working procedures
• Health and safety issues

 

If the judgement goes against you

If the judge rules in favour of the party bringing the case, your company might be required to pay compensation along with addressing the specific issue. Remedies could include reinstating the individual if the matter pertains to unfair or constructive dismissal.

You are also liable for covering their tribunal fees and other costs associated with bringing the case. Furthermore, failing to pay the claimant’s compensation may lead to fines, and the court may compel you to make the payment. 

Read More:

• What Happens When a Director Cannot Afford to Pay Their Personal Tax
• How to handle soaring overhead costs
• Common Reasons Why Small Business Startups Face a High Risk of Failure
• How to take money out of a limited company
• Solving a dispute with your accountant

What are the potential financial ramifications of such a judgement?

If the tribunal panel determines that you have intentionally and/or repeatedly violated the claimant’s employment rights, and you choose not to appeal or lose an appeal, your company could face a fine ranging from £100 to £5,000. Typically, this amounts to 50% of the compensation awarded to your employee. 

The fine is to be paid directly to the Secretary of State and may be reduced by 50% if payment is made within 21 days of the tribunal hearing. 

The potential imposition of up to three financial penalties resulting from an employment tribunal — encompassing compensation for your employee, their tribunal fees, and a fine for the breach of employment regulations — places your company under significant financial jeopardy.

Vanguard Insolvency stands ready to assist if you are confronted with an employment tribunal action. With expertise in managing adverse financial outcomes, we offer the guidance necessary to navigate through an unexpected loss of funds.

Having connections with over 50 alternative lenders in the UK, we provide the professional support essential for your situation. With over 100 offices spanning from Inverness down to Exeter, Vanguard Insolvency offers unparalleled director advice across the UK.