Employment claims in the civil courts
Working Families does not advise on civil claims. Therefore, in this advice page we offer only a high level summary of the way in which employment claims in the civil courts work. We also focus on breach of contract claims in the small claims track, i.e. with a value of up to £10,000, heard in the county court (this is usually referred to as the “small claims court”). This is because the process is simpler in such claims, and the risks are significantly different to the risks in other types of civil claims.
We strongly recommend that you seek specialist legal advice if you are considering submitting any claim to either type of court.
Some types of employment-related claims can be brought in the civil courts, rather than in an Employment Tribunal.
Very broadly, these claims usually relate to payments which you are owed under your employment contract (`breach of contract` claims), for example if you were not paid the correct amount for your notice period, or if you were entitled to receive commission payments under a commission agreement, but you were not paid the correct amount.
Some high earners will also want to pursue such claims in the civil courts due to the limit on the value of contract claims which an Employment Tribunal is permitted to hear (currently £25,000).
Do I have a choice on where I bring my claim?
Generally speaking, it is not permitted to make the same complaints in both the Employment Tribunal and the civil courts. If you have more than one legal claim arising from the same facts, such as an employer refusing to pay you a redundancy payment and at the same time not paying your wages under your contract, careful thought needs to be given in advance as to where the claim(s) can and should be brought. You should take advice about this.
The key issue to bear in mind is that Employment Tribunals will only ever be able to hear a breach of contract claim which exists or arises at the time your contract ends.
Statutory employment law gives employees and workers certain rights that can only be claimed in the Employment Tribunal (whether during the life of the contract or on its termination), for example the protection from unfair dismissal, protection from unlawful discrimination, and your right to receive the national minimum wage, paid holiday and rights in relation to protection from detriment for whistleblowing.
Employment tribunals have jurisdiction to hear claims for breach of contract under this legislation: Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 (S1 1994/1623). However, certain restrictions apply:
- The claim must arise or be outstanding on the termination of employment – the Employment Tribunal cannot consider a claim for breach of contract while you are still employed (See article 3 for more details).
- The Employment Tribunal cannot consider tort claims (negligence), personal injury, confidentiality/restraint of trade, intellectual property claims, data protection, human rights or Protection from Harassment Act 1997 claims (See articles 3 & 5 for more details).
- The damages that the Employment Tribunal can award are limited to a maximum of £25,000 (See article 10 for more details).
- The Employment Tribunal has a restricted ability to award interest in breach of contract claims. The civil courts have power to award interest from the date on which, according to their decision, the sum due should have been paid to the employee, whereas the Employment Tribunal can only deal with interest from the judgment date.
In summary, if you expect to be awarded more than £25,000 for breach of contract by your employer, you should bring the claim in the civil court.
I’ve already claimed in the Employment Tribunal, can I make another claim in civil courts?
Some employment claims may be brought in either an Employment Tribunal or the civil courts. If you have this choice, bringing a claim in the civil courts may be a more attractive option due to longer time limits (six years rather than three months), and the absence of a cap on awards. See our advice below on the advantages and disadvantages of the different routes, for cases where you have a choice.
However, if you have already pursued a claim in an Employment Tribunal, you may be prevented from switching to the civil courts. This is due to a doctrine known as “cause of action estoppel”, which prevents Claimants from bringing the same claim twice.
This doctrine exists largely for public policy reasons in that it supports finality of litigation, the idea being that if a court (e.g. the Employment Tribunal) has already reached a final decision on a case, it is not in the public interest to reopen that case in a different court.
What this means is that if a final decision has not yet been made in an Employment Tribunal, and the claimant writes to that Employment Tribunal explaining its reasons for wanting to withdraw its claim, it may still be possible to progress the claim in the civil courts instead.
If you are thinking about doing this, you should seek advice.
If you had a claim which could be brought in either place, and you brought it in the Employment Tribunal but you withdrew it, you may be able to bring it in the civil courts if it is still “in time”.
Which civil court hears employment claims?
Claims relating to the employment contract can be heard in either the County Court or the High Court.
Lower value claims are started in the County Court. There are a number of local county courts around the country and although you may start a claim in your local court, the employer may ask for it to be transferred to their local court, and a judge will make a decision on this.
There are several different levels of court within the civil courts. Depending on the nature of the claim and how much money is being claimed, cases brought in the civil courts will be allocated to one of three tracks. These are known as the multi track, the fast track and the small claims tracks. The simpler cases with a value of up to £10,000 will be allocated to the small claims track in the country court. They will be heard by a judge in a side room (called `chambers`) and the proceedings will be relatively informal.
What employment breach of contract claims can be brought in the small claims track?
Claims for breach of contract, both during the life of the contract and after it has ended, provided no more than £10,000 is being asked for. These includes claims for
- Unpaid wages
- Unpaid notice pay
- Unpaid holiday pay due under the contract. If you are claiming holiday pay under the Working Time Regulations, bring your claim in an Employment Tribunal.
- Compensation for contractual changes to terms of employment
(As noted above, claims which cannot be heard in the civil courts and therefore must be brought only in the Employment Tribunals include claims for unfair dismissal, for redundancy pay and for discrimination in employment – there are many others).
What are the advantages of bringing a claim in the small claims track?
- Time Limits: Civil claims for breach of contract can be brought for up to 6 years from when the breach happened. In an Employment Tribunal, claims can usually only be brought within 3 months less one day from when the breach happened.
- Throughout the Contract: A claim for breach of contract can be brought in small claims track even if employment is on-going. These claims can only be brought in the Employment Tribunal if they arise or exist at the time the employment contract has ended – see above
- Legal Costs: As in an Employment Tribunal, the general rule is that each party has to pay his or her own lawyers and legal costs if they choose to be represented, irrespective of who wins the case. Orders by the Employment Tribunal or the small claims track in the civil courts that you should pay your opponent’s legal costs as well as your own are rare. However, costs orders can be made in certain circumstances, including in the small claims court, and the total cost of this could be high once everything is added together, particularly if the amount you are hoping to be awarded by the court is not very high. For example, such costs in the small claims court can include accommodation costs for “the other side”, in certain circumstances.
In the Employment Tribunal there is also a `discretion` for the Employment Judge to order payment of the “other side’s” legal costs if you lose.
Please note that in any court, if there is unreasonable behaviour by a party, this can increase the likelihood that a costs order is made against that party.
And please note that in civil cases which end up in the multi or fast track, there is a very different approach to costs. It is therefore very important to get legal advice before issuing a claim, particularly if the value of the claim is higher than £10,000.
- Mediation: County courts provide a mediation service as an alternative to a contested hearing, which is less stressful. Mediation is available in Employment Tribunals but only in certain cases.
- User Friendly: As in an Employment Tribunal, but unlike in other civil court tracks, the procedure is relatively `user friendly`, and many if not most parties are not represented by lawyers.
What are the disadvantages of bringing a claim in the small claims track?
- Wages Claims and Proof: Some complaints based on breach of contract can sometimes instead be brought under other more advantageous legislation in an Employment Tribunal. For example, a complaint about unpaid wages of less than £10,000, where employment is ongoing, can be brought either as a claim for breach of contract in the small claims track, or as a claim for unlawful deduction wages in an Employment Tribunal. Proving these claims as wages deductions can be more straightforward because of the way employment law legislation provides rights.
- Wages Claims and Employer’s contract claims: If a claim for breach of contract for unpaid wages is brought in the small claims court, an employer can counterclaim for breach of contract (ie they can say that it was you who broke the contract and try to get compensation for that). An employer cannot bring a counterclaim to an Employment Tribunal claim for unlawful deductions in wages.
- Claims under one Umbrella: If you have several legal claims arising some the same set of facts, including claims that cannot be brought at all in the civil courts, it is usually more convenient and cheaper to bring all your claims together in the Employment Tribunal.
- Court Expertise: County court judges are experts in the county court process, but they are not employment law experts and you may find they are less quick to grasp the details of what went wrong in your job which led to you bringing a claim, or to understand as much about the context of various workplaces, unlike the Employment Tribunal which looks at what happens in workplaces all the time.
- Court Rules: You will be expected to follow the procedural requirements set out in the Civil Procedure Rules throughout the course of your proceedings. This will include meeting relevant deadlines. There may be consequences if you fail to follow the rules correctly.
- Award: the maximum amount of compensation that you can expect to be awarded in the small claims track is £10,000. In the Employment Tribunal the maximum amount of compensation that you can expect to be awarded is £25,000. However, the Civil Court fast track does allow for claims of up to £25,000.
- Cost/Time of Litigation: The requirements of civil litigation mean that it likely that more time will be spent when pursuing a claim in the civil courts, and additionally the various fees (e.g. small claims court fee) make it generally more expensive than a claim pursued in the Employment Tribunal.
- Please note that in a breach of contract claim in both the Employment Tribunal and in the civil courts, there is a duty on the employee to “mitigate their loss” which means that you need to be trying to minimise your loss, even if you are not at fault, e.g. by finding a new job, and you will need to be able to provide evidence of your efforts to mitigate your loss.
How do I bring a small claims track case, and what happens next?
- Pre-Action: Prior to starting a small claims case, you must raise the complaint before going to court. You should write to your employer stating how much you are owed and why, and giving your employer time (usually 14 days) to respond before starting the case. You should warn your employer in the letter that you will take court action if you do not get a reply by the deadline. Your letter should be sent by recorded delivery post and you should keep a copy of it.
- Forms: To start your claim, you complete form N1, available at www.justice.gov.uk. Alternatively you can use the Money Claims Service (www.moneyclaim.gov.uk) to make your claim electronically. To get help with a form N1 you could try your local Citizens Advice, but it is relatively straightforward, so a lawyer is not necessary.
- The court will allocate a case number to the case and will send your claim form to your employer (called the Defendant). The Defendant will have a set amount of time in which to respond to it (either 14 or 28 days).
- If your employer fails to respond within the deadline for them to do so, you should act quickly and ask the court to issue a judgment in default. (If you aren’t sure how much you are claiming, this will be more difficult).
- Allocation to Track: If the Defendant responds and says it is going to defend the case, the court will inform you of which track it intends to assign the case. This is called Allocation and is usually done by letter but sometimes the judge will want to meet the parties to discuss which track the case should go in ( called an Allocation Hearing ).You should attend this hearing or there is a danger that your case may be dismissed.
- Directions: The court will then set directions for the case. Directions are steps which each party must comply with by a stated deadline, in order for the case to be ready for a final hearing.
- Final Hearing: The case will then be listed for a full hearing .Be prepared and attend half an hour early, preferably with a friend or relative, and take all your papers with you. The final hearing sometimes takes place without a hearing in small claims cases. Do take look at some of our web pages on Tribunal claims where we have lots of hints and tips on how to prepare for a hearing.
For more advice on the civil courts and small claims see http://www.adviceguide.org.uk
This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.
The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.
We cannot provide advice on employment rights in Northern Ireland as the law is different. You can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.