Settlement after employer conceded unfair dismissal at hearing
A former employee settled her claims for £11,210.89 after the employer conceded unfair dismissal at the final hearing. The tribunal later ordered the employer to pay £6,485.88 in preparation time costs for unreasonable conduct.
1 min read · Last updated 18 May 2026
Key facts
- The claimant presented complaints of unfair dismissal, unauthorised deduction from wages, failure to pay national minimum wage, unpaid holiday, and breach of contract.
- The respondents initially denied all claims, arguing the claimant was self-employed.
- At the final hearing, the respondents conceded the claimant was an employee and that she was unfairly dismissed.
- The parties reached a settlement of £11,210.89 in full and final satisfaction of all claims.
- The tribunal later granted a preparation time order of £6,485.88 due to the respondents' unreasonable and vexatious conduct.
Timeline
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Claim presented
The claimant presented complaints against R1 and R2 for unfair dismissal, unauthorised deduction from wages, failure to pay national minimum wage, unpaid holiday, and breach of contract.
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R3 joined
Employment Judge Chapman KC ordered that R3 (Team Kitrinos Non-Profit Ltd) be joined as a party.
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Final hearing
At the hearing, the respondents conceded the claimant was an employee and that she was unfairly dismissed. After adjournments, the parties reached a settlement of £11,210.89.
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Judgment by consent sent
The judgment by consent was sent to the parties.
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Claimant requested reasons
The claimant requested written reasons for the judgment.
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Preparation time order application
The claimant applied for a preparation time order.
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Reasons for consent judgment
Employment Judge Klimov provided written reasons for the consent judgment.
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Tribunal invited submissions
The tribunal gave the respondents until 24 July 2023 to respond to the preparation time application, and the claimant until 31 July 2023 to reply.
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Preparation time order granted
Employment Judge Klimov granted the preparation time order of £6,485.88, finding the respondents' conduct unreasonable and vexatious.
The legal issue
The tribunal had to decide whether to make a preparation time order against the respondents for unreasonable and vexatious conduct in defending claims they knew had no merit.
The outcome
The tribunal approved a settlement of £11,210.89 in full and final satisfaction of all claims, after the respondents conceded at the final hearing that the claimant was an employee and was unfairly dismissed. The settlement covered claims for unfair dismissal, unauthorised deduction from wages, failure to pay national minimum wage, unpaid holiday, and breach of contract.
Separately, the tribunal granted a preparation time order of £6,485.88 against the respondents. This was because they had acted unreasonably and vexatiously by initially denying the claimant's employment status and defending claims they later admitted, including serving a late witness statement on the eve of the hearing. The respondents failed to respond to the application for the order.
Lessons & takeaways
- If you are a worker and your employer denies you are an employee, gather evidence of your working arrangements – tribunals will look at the reality of the relationship, not just the label.
- Employers who defend claims without reasonable grounds risk being ordered to pay the other side's preparation time costs, even if the claim settles.
- Serving evidence at the last minute can weaken your position and may be refused by the tribunal, potentially leading to adverse cost orders.
- A settlement can include all claims, but you may still apply for a costs order if the other side's conduct was unreasonable before the settlement.
This case shows how an employer's change of position at the last minute can lead to significant additional costs. The former employee brought multiple claims, including unfair dismissal and failure to pay the national minimum wage. The respondents initially argued she was self-employed, denying all claims. Only at the final hearing did they concede she was an employee and that she was unfairly dismissed.
What the employer did wrong
The respondents defended the claims for months on a basis they later abandoned. They also tried to introduce a witness statement served on the eve of the hearing, which the tribunal refused. This kind of conduct – defending without merit and late evidence – is precisely what the preparation time order rules are designed to penalise. The tribunal found the respondents' behaviour unreasonable and vexatious, leading to the £6,485.88 order.
Why this matters
For employees, this case is a reminder that even if your case settles, you may still be able to recover costs if the other side acted unreasonably. For employers, it highlights the risks of taking an untenable position in litigation. The preparation time order here was substantial – over half the settlement amount – and could have been avoided by early concession or proper case management.
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