Employment tribunal claims – the outcomes

If a claimant is successful in a claim for unfair dismissal against you, the employment tribunal may order you to either reinstate or re-engage them if appropriate – though this only applies to unfair dismissal claims.

The tribunal may also order you to pay the claimant financial compensation and the amount will vary depending on the nature of the claim.

This guide looks at the possible outcomes of an employment tribunal in more detail. It also covers how you might choose to appeal against a tribunal decision or judgment, and how to handle an appeal from a claimant if they are unsuccessful at the tribunal.

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Possible outcomes from employment tribunal cases

You may either succeed in defending a tribunal claim, or lose the claim – in whole or in part.

If you lose an unfair dismissal case, the tribunal may order one or more of the following:

• Reinstatement to the old job as if the claimant had never been away, on the same terms and conditions and with back pay and benefits – eg pension rights – for the period since dismissal.
• Re-engagement in a new job on similar terms and conditions to the old position. You may not have to pay any back pay if the employee’s conduct contributed to their dismissal.
• Financial compensation, which is by far the most common outcome – see the page in this guide on compensation for successful employment tribunal claims.

Tribunals will only order reinstatement or re-engagement if they believe it can actually work. If the tribunal orders you to re-employ the employee but you do not comply, it may increase the financial compensation.

If you lose a case relating to your refusal to allow a flexible working request, the tribunal can order you to reconsider your decision.

Costs and expenses

Costs can be awarded in exceptional circumstances, such as where the tribunal considers one party has acted unreasonably in pursuing or conducting their case. For example:

• A cost award can be made to cover legal costs for parties who were legally represented at the time the case was heard.
• A preparation time award covers time spent preparing for a case for a party who isn’t legally represented.
• Wasted costs orders are made directly against a paid representative on account of their own unreasonable conduct. This only applies to representatives who are acting in pursuit of profit, eg on a no-win, no-fee basis or paid legal representatives.

The limit on costs that the tribunal may itself award is £10,000, but a tribunal may order costs as assessed by an officer of the County Court, in which case the limit does not apply. Parties may also agree that costs of more than £10,000 are to be paid.

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Compensation for successful employment tribunal claims

The award to the claimant of financial compensation is the most common outcome of a successful tribunal claim.

Compensation in discrimination cases

There is no limit on the amount of compensation tribunals can award in cases of unlawful discrimination. See our guide on how to prevent discrimination and value diversity.

Compensation in unfair dismissal cases

There are three types of compensation for unfair dismissal:

• basic awards
• compensatory awards
• additional awards

The basic award depends on:

• The employee’s age. Counting back from the date of dismissal, they receive 1.5 weeks’ pay for a year of employment after their 41st birthday, one week’s pay for a year of employment after their 22nd birthday and 0.5 week’s pay for a year of employment up to their 22nd birthday.  
• Their length of service with you. Counting back from the date of dismissal, this is capped at 20 years.
• Their weekly pay. This is subject to the statutory limit on a week’s pay, which is currently £400.

Therefore:

• the maximum basic award is 1.5 x 20 = 30 weeks’ pay
• the maximum amount that can be awarded is 30 x £400 = £12,000

In most unfair dismissal cases, there is no minimum basic award.

The compensatory award is based on the tribunal’s assessment of the employee’s loss of earnings between the dismissal and the tribunal hearing, and the likely future loss of earnings, loss of pension rights etc.

Reinstatement or re-engagement orders

If you do not comply with an order for reinstatement or re-engagement the tribunal can make an additional award.

The award is on top of any previous award and can be between 26 and 52 weeks’ pay – although this is again subject to the £400 limit on a week’s pay.

Compensation in collective redundancy cases – failure to consult representatives

In a collective redundancy situation, you have a legal duty to consult with representatives of those employees affected by the proposed redundancies.

If you fail to do this, an employee or a representative may apply to a tribunal for a protective award. If the tribunal decides in their favour, it may order you to pay each affected employee up to 90 days’ pay.

This payment is calculated on the basis of a week’s pay. Note that if you are made to pay such an aware, there is no statutory cap on a week’s pay.

For more information on collective redundancy consultation, see our guide on redundancy: the options.

Compensation in business transfer cases – failure to inform and consult representatives

In business transfer situations, you must inform and consult with representatives of those employees affected by the transfer.

If you fail to do this, an employee or a representative may apply to a tribunal for compensation. If the tribunal decides in their favour, it may award compensation to each affected employee of up to 13 weeks’ pay.

Note that for such awards, there is no statutory cap on a week’s pay.

For more information on consultations during business transfers, see our guide on your responsibilities to employees if you buy or sell a business.

Guarantee pay

If you do not require an employee to work on a day when they would normally be contractually obliged to work, you may be required to make a guarantee payment to them. Failure to pay an employee who is entitled to guarantee pay is unlawful and the employee may take you to an employment tribunal. If the employment tribunal finds in the employee’s favour you may be ordered to pay the employee the guarantee pay.

In order to be entitled to guarantee pay, the employee must meet certain requirements. For more information on guarantee pay and to find out if your employees may be entitled to guarantee pay, see our guide: pay – an overview of obligations.

Compensation in trade union-related cases

There is a separate award for cases in which the tribunal finds that you have made unlawful inducements to individuals in relation to their trade union membership/activities and collective bargaining.

For details of trade union membership protection rights, see our guide on trade union membership rights.

Compensation in breach-of-contract cases

Where an employee makes a breach-of-contract claim to an employment tribunal (or an employer makes a counterclaim), there is a maximum amount that the tribunal may award in respect of that claim (or of a number of claims arising from the same breach of contract).

For details of minimum and maximum amounts and how these may be adjusted, see the page in this guide on tribunal compensation amounts and adjustments.

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Tribunal compensation amounts and adjustments

The amount of compensation awarded following an employment tribunal will depend on the nature and outcome of the case.

The limits on certain awards and payments are varied annually according to the Retail Prices Index.

Tribunal awards can also be increased or decreased if the employer or employee unreasonably failed to follow appropriate disciplinary or grievance procedures.

See a table of current tribunal compensation limits- Opens in a new window.

Adjustments to tribunal awards

An employment tribunal may increase any award made to an employee by up to 25 per cent if you unreasonably failed to comply with the Acas code of practice on disciplinary and grievance procedures.

The tribunal can also reduce the award by up to 25 per cent if the employee unreasonably fails to comply with the code.

Interest on tribunal awards

If you do not pay an award within 42 days of the date when the tribunal’s decision is sent to the parties, you will start paying interest only on the amount of award outstanding.

In cases of unlawful discrimination judgments, interest accrues from the day the tribunal’s decision is sent to the parties. However, no interest is charged if you pay the award in full within 14 days.

Amounts recouped by Jobcentre Plus are not included in the calculation of interest – see the page in this guide on recouping state benefits from employment tribunal awards.

Failure to pay tribunal awards

If you are an employer in England or Wales and you fail to pay an employment tribunal (or Employment Appeal Tribunal) award made against you, enforcement action can be taken in the county court or High Court. All methods of court enforcement (including bankruptcy and insolvency) are available to claimants.

The courts will also send details of your full name and address, date of birth, the case number and the amount of the award to be entered on to the Register of Judgments, Orders and Fines. The Register can be searched by the public and is also often used by banks, building societies and credit companies when considering applications for credit. Unless you pay the award within one month of registration, your details will remain on the Register for six years.

Any enforcement action will result in additional costs being incurred and these will be added to the outstanding amount due. You will have to pay these costs as well as the original award. The claimant may also be able to charge interest on the amount owed.

In Scotland, claimants can request an extract of the judgment and send it to the Sheriff Officer. The Sheriff Officer may then use this to enforce the payment.

Deductions for income tax and National Insurance

Where the employment relationship has already ceased, you do not normally have to deduct income tax and National Insurance contributions (NICs) from tribunal awards. (These awards are generally based on net pay.) However, if:

• an award is over £30,000 – income tax may be payable
• a tribunal orders reinstatement or re-engagement – you must deduct income tax and NICs from the pay for the period between the date of dismissal and the date of reinstatement or re-engagement

To find out more about your tax and NICs obligations, contact the HMRC Employer Helpline on Tel 08457 143 143.

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Recouping state benefits from employment tribunal awards

In order to prevent double payment, Jobcentre Plus (JCP) can recover from you some or all of the amount of jobseekers’ allowance and income support (‘state benefit’) it pays to an ex-worker who is then awarded compensation by an employment tribunal. This process is known as ‘recoupment’.

Cases where the recoupment rules apply

These rules apply when an employment tribunal makes a monetary award for:

• unfair dismissal – including interim relief orders
• failure to make a guarantee payment
• failure to pay an individual employee a protective award
• failure to pay wages during a period of medical or maternity suspension

The rules also apply to awards for failure to consult workplace representatives in collective redundancy situations, ie protective awards themselves.

Recoupment and monetary awards

If an individual receives ‘state benefit’ during the period covered by a monetary award, the tribunal will identify how much of the award represents arrears of pay – or compensation for loss of earnings – up to the date of the tribunal hearing. This part of the award is called the ‘prescribed element’ and is the only part of the award JCP can recoup.

You should pay the employee the difference between the prescribed element and total award immediately.

However, you must not pay the prescribed element to the individual until you receive a recoupment notice from JCP. If you pay the prescribed element to the individual beforehand, you will still have to pay JCP the amount specified in the notice.

You will receive notification from JCP:

• where a judgment is announced at the tribunal hearing – within 21 days following the announcement or within nine days of the judgment being sent to the parties, whichever is the later, or as soon as practicable after this period
• where no such announcement is made – within 21 days of the judgment being sent to the parties or as soon as practicable after this period

The recoupment notice will tell you to pay the lesser of:

• the prescribed element – after any income tax and National Insurance contributions (NICs) due have been deducted
• the total amount of state benefit received by the individual for any part of the period covered by the prescribed element

When you receive notification, you must – if you haven’t already – immediately pay the difference between the prescribed element and total award to the employee.

Recoupment and protective awards

If a tribunal finds that you failed to consult workplace representatives in a collective redundancy situation, the tribunal may require you to pay a protective award to the redundant employees or those you proposed to make redundant – see our guide on redundancy: the options.

When an employment tribunal makes a protective award, it will notify JCP and advise you to send JCP the following information:

• the name, address and National Insurance number of each employee entitled to a payment under the award
• the date – or proposed date – of termination of employment of each employee covered by the award

You must send the information within ten days of the judgment being announced at the hearing or, if not, when it was sent to the parties. If you can’t meet this deadline, you must do it as soon as reasonably practicable.

JCP will send you a recoupment notice within 21 days of receiving the above information or as soon as practicable. You must not pay any employee who has claimed or received ‘state benefit’ until you receive this notice.

The recoupment notice will tell you to pay a specified amount to JCP out of the amount due under the award. This amount will be the lesser of the:

• amount due – after the deduction of any income tax and NICs – from the start of the protective award period to when you sent JCP the necessary information
• total amount of the ‘state benefit’ received by an employee for any part of the same period

Once you receive notification, you must immediately pay the employees any difference between the recoupment amount and total protective award.

If you pay an employee this amount before receiving a recoupment notice, you will still have to pay JCP the amount specified in the notice.

Recoupment following appeals

If you appeal – or apply for a review – JCP should suspend recoupment until the outcome is known.

If JCP has already recouped and the amount of recoupable benefit is subsequently altered as a result of an appeal or review, JCP will pay back any excess or recover a further amount as appropriate.

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Getting an employment tribunal to review its judgment or decision

Employment tribunal judgments and decisions may be changed only:

• if the tribunal decides – at the request of either side or on its own initiative – to review the judgment
• after an appeal by one of the sides involved in the judgment – see the page in this guide on appealing against an employment tribunal judgment

Getting a tribunal to review a default judgment

You can apply to the tribunal to ask it to review a default judgment. You must apply in writing within 14 days of the date the judgment was sent to you by the tribunal office. Your application must state why the judgment should be reviewed.

An employment judge may extend the time limit for reviewing a default judgment but only if they think it is just and equitable to do so.

In these circumstances, your application must include:

• your response to the claim
• an application to extend the time limit for presenting the response
• an explanation of why the tribunal did not receive a response containing the necessary information or an application to extend the time limit within the time limit for responding

The tribunal has the power to refuse to review the default judgment, confirm it, change it or revoke it.

Getting a tribunal to review other judgments and decisions

You can apply to the tribunal to ask it to review a:

• decision not to accept your response to a claim
• non-default judgment – ie a judgment other than a default judgment

You must apply in writing within 14 days of the date the judgment was sent by the tribunal office. An employment judge may extend the time limit for reviewing a judgment but only if they think it is just and equitable to do so.

The tribunal may review a decision not to accept your response to a claim if:

• it is in the interests of justice, or
• the decision was wrongly made as a result of an administrative mistake

The tribunal may review a non-default judgment only where:

• The judgment was made in the absence of one side.
• The judgment was wrongly made as a result of an administrative mistake.
• One side did not receive notice of the proceedings leading to the judgment.
• New evidence has become available since the end of the hearing to which the judgment relates, provided its existence could not have reasonably been known at that time.
• It is in the interests of justice to carry out a review. This does not mean a judgment or decision will be reviewed just because you disagree with it. Something must have gone wrong at – or in connection with – the hearing or something must have happened since the hearing which makes the judgment or decision unjust.

If you apply for a review based on new evidence, you must explain why the evidence was not available beforehand and include a full statement of the evidence which you want to introduce.

The tribunal has the power to refuse to review the judgment or decision, confirm it, change it or revoke it.

Relationship between an application for review and appeal

An application for review does not change the time limit for making an appeal to the Employment Appeal Tribunal (EAT), ie you may appeal to the EAT while waiting for the result of the application – see the page in this guide on appealing against an employment tribunal judgment.

You must also lodge with the EAT a copy of the application for review and, if the application has been heard and determined, a copy of the tribunal’s decision on the review.

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Appealing against an employment tribunal judgment

You may only appeal to the Employment Appeal Tribunal (EAT) on a point of law.

Broadly, a point of law is one which concerns the interpretation of the legislation and its application to the facts of the case.

Where the employment tribunal has made findings of fact based on the evidence it has read or heard, eg where the tribunal sets out what they believed actually happened, or why someone acted as they did, you cannot challenge this – even if you think that the tribunal was wrong to make those findings.

As well as appeals against judgments, appeals to the EAT can also be made against Interim decisions, directions or orders made by an employment tribunal. An appeal to the EAT may therefore be made where, for example, the tribunal has granted or refused to grant a witness order, a postponement or deadline extension.

In order for the EAT to accept your notice of appeal (EAT Form 1), you must ensure that you:

• give full details of why you think there are grounds for appeal
• enclose a copy of the claim (form ET1), response (form ET3), judgment and written reasons

If you have also applied to the employment tribunal for a review, you should also enclose a copy of the review application, judgment and written reasons. If the review judgment is awaited then you should say so.

If you believe that an employment tribunal judgment, decision, direction or order made during the proceedings is wrong, you should not wait until the final judgment (or the outcome of a review) to lodge an appeal.

Note that the employment tribunal normally destroys files within one year of sending the judgment to the parties involved.

If the notice of appeal is rejected

If your appeal application is incomplete and/or received without the correct supporting documentation, the EAT will regard it as not properly instituted.

In these circumstances:

• they will write to you explaining what is missing and what you still need to do
• the 42-day time limit remains, so you should comply with the request made by EAT within that limit

If the notice of appeal is accepted as properly instituted

If you provide all the required documents, or explanations for their absence, then the EAT will tell the other party (or parties) that you have appealed.

However, some time may elapse before they are asked to respond.

The EAT will first consider whether the appeal has any reasonable prospect of success.

Responding to a cross appeal

If the claimant – or one of the other respondents if there was more than one – cross appeals, you must lodge and serve a reply.

This must take place within 14 days of receiving the cross-appeal – unless otherwise directed.

You can download the employment tribunal cross appeal reply form [opens in a new window].

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Deadlines for sending an appeal to the Employment Appeal Tribunal

An appeal is only commenced when it is received complete at an Employment Appeal Tribunal (EAT) office, whatever the method used to deliver it. Time limits are strictly enforced, including the 16.00 deadline.

You are strongly advised not to leave the sending or transmission of appeals to the last minute, but to leave enough time to allow for delays, or to correct errors.

The EAT must receive your notice of appeal, along with supporting documents, no later than 16.00 on the 42nd day after the date on which the employment tribunal sent you the judgment, decision, direction or order.

The 42nd day will be the same day of the week, six weeks later.

If you send your appeal by fax or email on the day of the deadline, the transmission must be fully complete by 16.00 to be in time.

If the deadline falls on a day on which the EAT office is closed, it is extended to 16.00 the next working day.

The judgment, decision, direction or order is not the same as the reasons. You may need to ask the employment tribunal for the reasons, but (unless one of the circumstances below applies) you should not wait until you receive them before sending your appeal, or it may be out of time.

You may count the 42 days from the date the reasons were sent to you if one of the following circumstances applies:

• you requested written reasons at the employment tribunal hearing
• you wrote to request written reasons from the employment tribunal within 14 days of the date it sent you the judgment
• the employment tribunal reserved its reasons and gave them subsequently in writing

The 42-day time limit applies even if the tribunal has not decided on a remedy or if you have asked the employment tribunal to review its decision.

If your review is successful and you intend to withdraw your appeal, you must tell the EAT immediately.

See the page in this guide on getting an employment tribunal to review its judgment or decision.

Applying to the EAT for an extension of time

You can make an application to the EAT for an extension of time to lodge an appeal.

However, you can only do this at the time of, or after, lodging a notice of appeal.

You must make a formal application, addressed to the Registrar, giving full reasons for the delay. The application will be determined by the Registrar upon consideration of the papers.

You should note, however, that time will be extended only in the most exceptional circumstances. Any appeal against the Registrar’s refusal of the application must be made to the EAT within five working days.

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Sending the appeal documentation to the Employment Appeal Tribunal

You should not leave sending your appeal until the last minute, as the Employment Appeal Tribunal (EAT) applies time limits very strictly. For more information on the time limit for lodging an appeal, see the page in this guide on deadlines for sending an appeal to the Employment Appeal Tribunal.

You must send your appeals to an EAT office – if you send your appeal to an employment tribunal office they will send it back to you.

If you choose to send your notice of appeal and supporting documents by post, for claims originating in England or Wales you should send them to the following address:

Employment Appeals Tribunal
Second Floor
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX

For claims originating in Scotland, you should send them to the following address:

EAT
52 Melville Street
Edinburgh
EH3 7HS

You can also fax the EAT on Fax 020 7273 1045 in England or Wales and on Fax 0131 220 6694 in Scotland. Alternatively, you can email them at londoneat@tribunals.gsi.gov.uk in England or Wales, or at edinburgheat@tribunals.gsi.gov.uk for Scotland.

The size of any one email, including attachments, must not exceed 10MB. Sending document by email can make them up to 35 per cent larger so you should limit the size of documents which you attach to about 7MB. Attachments must be in a format which can be read by Microsoft Word 2003, Adobe Reader 9.0 or Windows Picture and Fax Viewer – eg files ending in .doc, .rtf, .pdf or .jpg. Files may be zipped in a format which can be unzipped by Windows Explorer XP (SP3). All documents to be lodged electronically must be sent to the EAT as attachments to emails. A document is not validly lodged by sending the EAT a link to its location.

Once the EAT receives your appeal, it will allocate the case to a case manager. They will be responsible for the case throughout and you will be kept informed of proceedings at every stage.

You should get an acknowledgment of receipt from the EAT within seven days. If you don’t, you should contact them by phone or email.

EAT hearings

Appeals against employment tribunal judgments are heard at the EAT by a judge sitting alone or a judge and two lay (non-legal) members.

The EAT doesn’t usually listen to new evidence.

You may represent yourself or be represented, eg by your employers’ association or a solicitor.

Appeals from the EAT

It’s possible to appeal to the Court of Appeal (Civil Division) on a point of law but only with the permission of the EAT or the Court of Appeal itself.

Further appeals may be made to the Supreme Court (previously the House of Lords). In certain cases, a reference may be made to the European Court of Justice.

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Responding to an appeal to the Employment Appeal Tribunal

If the claimant appeals against the judgment, the Employment Appeal Tribunal (EAT) will tell you that they have received the appeal but some time may elapse before you are asked to respond. The EAT will first consider whether the appeal has any reasonable prospect of success.

If the EAT considers that there is a case to answer, they will send you – or your representative – the notice of appeal (with any amendments which have been permitted) and supporting documents.

You must then respond by filling in EAT Form 3. This must reach the EAT within 14 days of the date the appeal documentation was sent to you (unless otherwise directed). You must also send your response to the appellant or their representative.

Cross appealing

You may – if you wish – cross appeal. If you decide to do so, the appellant must lodge and serve a reply within 14 days of service (unless otherwise directed).

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