Employment tribunals - what to think about before you start a claim
You need to think about how strong your employment tribunal claim is before you go ahead with it.
If your evidence is weak and your claim looks like it has little or no chance of success, the judge will be able to strike it out before it gets to a hearing.
If you can’t settle with your employer
- Would you be prepared to go to a tribunal?
- Do you have enough evidence to support your claim?
- Do you have legal expenses cover through your home contents or car insurance that could cover the costs of going to an employment tribunal?
- If you're a member of a union, will they give you financial assistance and other help to prepare the claim?
- If you can’t get help from a representative, will you be able to give enough time and commitment to prepare the claim yourself?
- If you were to win, is your employer likely to pay you what you’re owed?
- Many people find making a claim and attending a hearing very stressful. Could you cope with this?
How strong is your claim?
The new Employment Tribunal process is designed to stop claims which have little or no chance of success.
A judge will look at all claims that are received to see if there are enough grounds for taking them further. They will strike out any claims which they don't believe will succeed.
It's important if you want to make a claim that you have enough evidence to convince the judge that your case should be heard.
If the judge does strike out your claim, you can ask for a review of the decision but this is unlikely to change if you can't provide any more evidence to change their minds.
Will your employer pay you the compensation you're owed if you win your claim?
Government research suggests that just over half of people who win an employment tribunal never get their payments in full. You may win your case but still end up out of pocket.
It's important to think about whether you're actually going to get any money if you win.
Think about the type of employer you've been working for. You'll need to consider whether they're financially stable. Usually, the bigger the company, the more likely they are to be able to pay compensation promptly and in full.
It’s also worth checking if your employer has had any other employment tribunal cases brought against them - and if they had to pay compensation. You can check the Register of Judgments, Orders and Fines to see if they’ve paid it. If you want to see the judgment itself, you can search for it on GOV.UK. It contains selected judgments from 2015 onwards.
Employers to watch out for
Some employers may have a history of avoiding paying compensation. If you work for any of the following types of employer do some research to find out how likely you are to be paid compensation if you win.
Companies who may be more likely to avoid paying you could be small limited companies or sole traders. A limited company usually has the letters Ltd after the company name.
Companies who have a history of winding up and restarting again under a new name
It's quite easy for small limited companies to avoid debts. The owners of the company simply transfer their assets, such as the stock, customer orders and staff, to a new company and wind up the old one. The debts of the old company don't transfer to the new one. They are sometimes called Phoenix companies.
If your employer does this and you win your case, you can't make the new company pay you what you're owed even if your employer's running an identical business. This is because your claim is against the original company, which no longer has any assets, so you can't get your money. If you find your employer has done this in the past that might mean they will do it again to avoid paying what they owe you.
Companies which have stopped trading
If your employer was a limited company and has stopped trading, there is a risk that the company has no money or assets to pay you. Even if the people who owned the company have money, your claim is against the company not them, and they will not usually be made to pay your compensation personally.
However, if you make a discrimination claim the company directors may be personally responsible.
If your employer is insolvent you may be able to make a claim to the National Insurance (NI) Fund
Sole traders who have stopped trading
Even if your employer no longer has any business assets, you can ask for payment taken from the trader's personal assets, such as a car or house, but you will need to consider whether they have any assets and whether you're prepared to go to court to get a judgment to pay you.
You can tell if a trader is a sole trader as it usually says this in formal documents.
You now have to pay a fee to get this judgment, so check whether the amount you're entitled to as a redundancy payment is worth the fee you'll have to pay.
Employers who have become insolvent, are in administration, liquidation or have gone bankrupt
There is a government scheme which pays you some of the money you might be owed if your employer becomes insolvent. This is called the National Insurance Fund (NI Fund).
If you have claims which cannot be paid from the NI Fund it is usually not worth chasing a claim against your employer because they will have no money to pay you and it can be complicated to make a claim because you may need to get permission from the administrators or a court.
Employers who are in financial difficulty
If your employer is in financial difficulty, this is a clear sign that you are unlikely to get your money.
Checking your employer's financial status
You can find out more about your employer's financial status from Companies House. It costs £1 to use their online checking service.
Other useful information
- Companies House, at www.companieshouse.gov.uk