A Former Employee is Threatening Legal Action - How Should I Respond?

Posted on 23 Sep 2025

Few things can be more unsettling for an employer than receiving notice of a possible employment tribunal claim.                                                                                 

It can sometimes be tempting to dismiss such communications, particularly when there is a belief that you have done nothing wrong. However, how you respond in these early stages can make all the difference.

Here are some key steps to consider:

1. Seek Legal Advice Early

You may be thinking, “well you would say that, wouldn’t you.” However, obtaining proper advice at the outset can prevent significant cost and stress later down the line. Early advice will help you assess the risk, including the merits of the claim (for instance, whether the claim is even within the legal time limits to be brought) and your prospects of successfully defending it. This early assessment also feeds directly into developing a sensible litigation strategy, whether that means preparing to defend robustly or exploring settlement.

2. Consider Settlement

It makes sense to weigh up the benefits of settlement at an early stage, before incurring the legal costs in defending a claim. Any settlement decision should be guided by the risk assessment above which will take in account many factors beyond the strengths and weaknesses of the claim, including (but not limited to) reputation and publicity, deterrents and precedents, witness cooperation and credibility and the commercial benefit for your business. Remember that, before bringing a claim in the Employment Tribunal, the former employee must first go through ACAS Early Conciliation. This process provides an opportunity for both sides to explore settlement with the assistance of an independent conciliator.

3. Respond Professionally

Employment disputes can be highly emotional, but maintaining a professional and respectful tone when responding to the former employee will prevent you from potentially damaging your case and/or your character should you end up as a witness in the tribunal. Any hostile or emotional reaction risks inflaming the situation - and, importantly, anything you say may later be scrutinised during the proceedings.

4. Document the Situation

Keep detailed records of all communications with the former employee, including any threats of legal action. This documentation can become vital evidence if proceedings are initiated, helping to demonstrate the steps you took and the fairness of your processes. Creating a timeline of key events if you haven’t already can be helpful to assist those advising you.

5. Preserve Information and Documents

Ensure that any information and documents relevant to the potential claim are preserved. This includes letters, emails, texts, WhatsApps, and internal notes. Subject to limited exceptions, you will have a duty to disclose such evidence if proceedings are brought - whether the evidence supports your case or not. Taking steps to secure relevant materials avoids the risk of accidental deletion or disputes about missing records later on.

6. Preventing Future Claims

While dealing with the immediate threat is the priority, it is also worth reflecting on how to reduce the risk of similar disputes in the future. Steps may include:

• Ensuring employment contracts and policies are up to date, legally compliant and work for you as a business.

• Training managers on how to handle performance, grievances, and dismissals fairly.

• Conducting staff surveys to identify and remedy any inherent cultural problems, or pockets of dissatisfaction/concern.

These preventative measures can enhance your organisation’s legal resilience while also supporting a workplace culture that makes disputes less likely to arise.

Aticle by David Yazdi, HY Solicitors

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