An Employee Is Threatening a Tribunal - What to Do

An employee has just said the words every business owner dreads: “I’ll take this to a tribunal.”

Maybe it came out in a heated meeting. Maybe it landed in a grievance letter. Maybe it arrived via a solicitor’s email with a lot of Latin in it. Either way, your stomach has dropped and you’re now googling at 9pm.

First, breathe. Here’s the thing nobody tells you in that moment: most tribunal threats never become tribunal claims. The gap between “I’m going to sue you” and an actual hearing is long, expensive for both sides, and full of off-ramps. Your job right now is not to panic, not to retaliate, and not to make the three or four classic mistakes that turn a defensible situation into a costly one.

This guide walks you through exactly what to do - in the first 48 hours, through ACAS early conciliation, and (if it comes to it) beyond - including how settlement agreements and protected conversations can resolve things quietly and quickly.

What “threatening a tribunal” actually means

An employment tribunal is the UK court that hears workplace disputes - unfair dismissal, discrimination, unlawful deductions from wages, whistleblowing and so on. But an employee can’t simply “take you to a tribunal” tomorrow morning. There’s a process, and every stage of it is an opportunity to resolve things:

1. The threat. A verbal comment, grievance letter or solicitor’s letter. No claim exists yet.
2. ACAS early conciliation. Before lodging almost any tribunal claim, the employee must notify ACAS, who will offer to conciliate between you. Since 1 December 2025, this period can run for up to 12 weeks.
3. The ET1. If conciliation doesn’t resolve it, ACAS issues a certificate and the employee can submit a claim form (the ET1) to the tribunal.
4. Your defence (ET3). You get 28 days from receiving the claim to respond. Miss this and the tribunal can decide the case without you.
5. The hearing. Typically many months - often more than a year - after the original dispute.

So a threat is the start of a road with multiple exits, not a summons. Most disputes settle or evaporate somewhere between stages 1 and 3.

The first 48 hours: what to do

1. Take it seriously, but don’t take it personally

A tribunal threat is sometimes a genuine statement of intent. Just as often it’s a negotiating position, a cry of frustration, or something the employee’s mate down the pub told them to say. You won’t know which yet - so treat every threat as if it’s real, without treating the employee as if they’re now the enemy.

2. Write everything down - today

Make a factual, dated note of what was said, by whom, when and in front of whom. Do the same for the background: the decision or incident the employee is unhappy about, who was involved, and what process was followed. Memories fade fast, and tribunals are won and lost on contemporaneous records.

3. Preserve every document

Emails, WhatsApp messages, meeting notes, appraisals, the personnel file - keep all of it, exactly as it is. Deleting or “tidying up” documents after a threat is one of the fastest ways to destroy your credibility with a tribunal (and can be inferred against you). Pause any auto-delete settings on relevant inboxes and channels.

4. Limit who knows

Brief only the people who genuinely need to know - typically you, your HR support, and the employee’s direct manager if relevant. Office gossip about “the one who’s suing us” can itself become evidence of victimisation.

5. Get proper advice before you reply

Before you send any substantive response to the employee or their solicitor, talk to an HR professional or employment solicitor. One badly worded email - “well if that’s your attitude, maybe this isn’t the place for you” - can convert a weak claim into a strong one.

The first 48 hours: what NOT to do

Don’t retaliate. This is the big one. Treating an employee differently because they’ve raised (or threatened) a claim - cutting their hours, freezing them out of meetings, suddenly finding fault with their work - is victimisation, and it’s a standalone claim in its own right. Plenty of employers have successfully defended the original complaint and then lost on how they behaved afterwards.

Don’t suspend or dismiss as a knee-jerk. Dismissing someone shortly after they threaten a claim looks exactly how it sounds. If there are genuine, separate performance or conduct issues, they need to be handled through a proper, documented process - ideally one that was already underway.

Don’t have an off-the-record chat without knowing the rules. “Off the record” is not a magic phrase. There are specific legal mechanisms (more below) that protect settlement conversations - and specific ways to lose that protection.

Don’t ignore it. Silence doesn’t make threats go away; it makes employees feel unheard, which is precisely the fuel tribunal claims run on. If the threat came inside a grievance, deal with the grievance properly and promptly.

Don’t admit liability or apologise for things you haven’t investigated. Empathy, yes - “I can see you’re upset and I want to understand this properly.” Admissions, no.

 

Need some help dealing with a tribunal?  Book a confidential call with one of our team today [here]

 

Deal with the underlying complaint properly

In most cases, a tribunal threat sits on top of a grievance - formal or informal. Your single best move is almost always to run a genuinely fair process on the underlying issue:

• Acknowledge the complaint in writing and explain what will happen next.
• Investigate properly: speak to the employee, speak to witnesses, review documents.
• Hold a grievance meeting, allow a companion, and keep minutes.
• Give a reasoned written outcome and offer a right of appeal.

Two reasons this matters. First, a fair process often resolves the actual problem - a surprising number of “I’ll see you in court” situations end with “actually, thank you for listening.” Second, if the claim does proceed, tribunals look hard at how you handled things. Following the ACAS Code of Practice isn’t just good manners; a tribunal can adjust compensation by up to 25% depending on whether either side unreasonably failed to follow it.

ACAS early conciliation: your first real off-ramp

If the employee decides to proceed, their next compulsory step is notifying ACAS. A conciliator will contact both sides and offer to help you reach a settlement. Key things to know:

• It’s free and voluntary. You don’t have to engage, but you almost always should - it’s the cheapest, quietest exit available.
• It now lasts longer. For notifications made on or after 1 December 2025, early conciliation can run for up to 12 weeks (it used to be six).
• Nothing said in conciliation can be used against you in the tribunal. It’s a genuinely safe space to talk numbers.
• Settlements reached via ACAS are recorded on a COT3 - a legally binding agreement that ends the claim, usually in exchange for a payment and confidentiality.

Treat the conciliator as a channel, not a judge. They won’t tell you who’s right; they’ll tell you what the other side wants, and help you find out whether there’s a deal to be done.

Time limits: how long the threat hangs over you

At the moment, most tribunal claims must be brought within three months less one day of the act complained of (usually the dismissal or the incident), with the clock paused during ACAS early conciliation.

That’s changing. Under the Employment Rights Act 2025, the time limit for most claims is being extended to six months, expected to take effect from October 2026. Combined with the 12-week conciliation window, an employee could realistically start a claim the best part of a year after the event.

The practical takeaway for you: keep your records for longer, take witness statements early (people leave), and don’t assume that because three months have passed quietly, the risk has passed with it.

Settlement agreements and protected conversations: making it go away properly

Sometimes the relationship is clearly over, the risk is real, and the commercial answer is a clean, agreed exit. Done properly, this is completely legitimate. Done badly, the conversation itself becomes evidence against you. Here’s how the machinery works.

Protected conversations (section 111A)

A protected conversation lets you propose a settlement - “we’d like to discuss an agreed exit” - without that conversation being used as evidence in an ordinary unfair dismissal claim, even if there’s no existing dispute. Ground rules:

• The protection covers ordinary unfair dismissal only. It does not apply to discrimination, whistleblowing or automatic unfair dismissal claims - so if the employee is alleging discrimination, assume everything you say could be read out at a hearing.
• The protection disappears if there’s “improper behaviour” - threats (“take this deal or we’ll dismiss you anyway”), harassment, or putting someone under undue pressure. ACAS guidance suggests giving the employee at least 10 calendar days to consider a written offer.
• Frame it carefully, keep it respectful, and put the offer in writing afterwards.

“Without prejudice”

The older cousin of the protected conversation. Without prejudice protection covers genuine settlement discussions where a dispute already exists - which, if you’ve received a tribunal threat, it arguably does. It covers all claim types, but only works if there’s a real dispute and a genuine attempt to settle.

In practice: if an employee has threatened a tribunal, settlement discussions are usually both without prejudice and (for unfair dismissal purposes) protected under s.111A. Label your letters accordingly - and take advice before the conversation, not after it.

Settlement agreements

If you reach a deal, it’s recorded in a settlement agreement - a legally binding contract in which the employee waives their right to bring claims, usually in exchange for a payment, an agreed reference and confidentiality. To be valid, the agreement must be in writing and the employee must receive advice from an independent adviser (usually a solicitor - and the employer typically contributes £350–£500 towards the cost). Without that advice, the waiver isn’t worth the paper it’s printed on.

Is paying someone to leave galling when you think you’ve done nothing wrong? Sometimes, yes. But weigh it against the alternative below.

What defending a tribunal claim actually costs

Even when you win, you usually lose. Costs are rarely awarded in tribunals - each side generally pays its own way regardless of outcome. Budget realistically for:

• Legal fees. Defending a straightforward claim to a full hearing commonly runs to five figures; complex discrimination claims considerably more.
• Management time. Disclosure exercises, witness statements, preparation and hearing days pull you and your managers away from the business for weeks in aggregate.
• The human cost. Tribunal claims are stressful for everyone involved - including the colleagues who get called as witnesses.
• Reputation. Tribunal judgments are published online, with your company name on them, findable by every future candidate and client.

This is why sensible employers engage seriously with early conciliation and settlement - not because they’re admitting fault, but because they can do the maths.

Why the stakes are about to get higher

Two further changes under the Employment Rights Act 2025 make prevention dramatically more valuable:

• From 1 January 2027, the qualifying period for unfair dismissal drops from two years to six months. Anyone with six months’ service at that date is immediately protected - which means employees who joined you from 1 July 2026 onwards will be covered the moment they hit six months.
• From the same date, the cap on unfair dismissal compensation is removed entirely.

In plain English: more of your people will be able to claim, they’ll have longer to do it, and the downside if you get it wrong will no longer have a ceiling. The era of “they’ve got less than two years’ service, we can just let them go” is ending.

The best time to fix this was before the threat

Here’s the uncomfortable truth we see every week: by the time someone threatens a tribunal, the outcome is largely determined by what you did (or didn’t do) months earlier. The contract that was never issued. The probation review that never happened. The grievance procedure copied off the internet in 2019. The manager who was never trained to have a difficult conversation.

If this threat has made you wonder what else is lurking in your HR foundations, find out now - while it’s cheap to fix.

Take our free HR Health Check [HERE]. Twelve quick questions, five minutes, and you’ll get a Green/Amber/Red picture of exactly where your business is exposed - contracts, policies, processes and the new Employment Rights Act requirements - plus practical next steps for each gap.

And if the threat on your desk right now needs a human, book a call [HERE].  We’ve handled hundreds of these. Most never see the inside of a tribunal room - and with the right first moves, yours probably won’t either.

FAQs

Can an employee take me straight to a tribunal?

No. With very limited exceptions, an employee must first notify ACAS and go through early conciliation before a tribunal will accept their claim. That process - plus tribunal waiting lists - means a hearing is typically many months away, and there are several opportunities to resolve matters before then.

How long does an employee have to bring a tribunal claim?

Currently, most claims must be brought within three months less one day of the event, with the clock paused during ACAS early conciliation. Under the Employment Rights Act 2025 this is being extended to six months for most claims, expected from October 2026. [Claire to verify at publication.]

Should I just dismiss an employee who threatens a tribunal?

No. Dismissing someone because they’ve threatened or brought a claim is automatically unfair and likely victimisation - and it hands them a much stronger case than whatever they started with. Any genuine, separate performance or conduct issues must be handled through a fair, documented process.

What is a protected conversation?

A protected conversation (under section 111A of the Employment Rights Act 1996) lets an employer propose an agreed exit without the discussion being used as evidence in an ordinary unfair dismissal claim. The protection doesn’t cover discrimination or whistleblowing claims, and is lost if the employer behaves improperly - for example, by pressuring the employee to accept.

How much should I offer to settle?

It depends on the strength of the claim, the employee’s salary and service, how long they’re likely to be out of work, and what defending the claim would cost you. Many disputes settle for a few months’ pay - often less than the cost of defending even a winnable claim. Take advice on the specific numbers before you open negotiations.

Do I need a solicitor, or can HR support handle it?

For the early stages - responding to a grievance, engaging with ACAS conciliation, structuring a settlement conversation - experienced HR support is usually sufficient and far more cost-effective. If a claim is formally lodged, or the allegations include discrimination or whistleblowing, you’ll want employment law input alongside. (The employee will need independent legal advice on any settlement agreement regardless - that’s a legal requirement for the agreement to be binding.)