The Government’s controversial proposals to increase the qualifying period to claim unfair dismissal have moved a step closer to becoming law. From the draft legislation published earlier this month, it is now clear that the change in law will not have retrospective effect and we at least now have clarity on this issue.
It has been confirmed that the current one-year qualifying period will continue to apply to employees who started employment before 6 April 2012. For employees employed on or after 6 April 2012, the qualifying period for unfair dismissal will increase to two years. Therefore, from a practical perspective, if employers are planning on recruiting staff over the next few months, if the business needs allow, it is likely to be preferable to set a start date on or after 6 April 2012.
Why the increase?
For those that can remember, prior to June 1999 the qualifying length of service was initially two years, so many argue that the forthcoming increase is a step back in time for UK employment legislation. The two years qualifying period was reduced by the Labour Government, allegedly resulting in an influx of unfair dismissal claims being lodged in the employment tribunal.
The Government hopes that employers will have the confidence and flexibility to recruit in the turbulent economic climate.Employment law has often been criticised for being weighted in favour of employees and it is suggested the change is an attempt to redress this balance.
A reduction in claims?
Although employees who start employment on or after 6 April 2012 will not be able to bring a claim for unfair dismissal under normal principles until they have been continuously employed for 2 years, they will still have a right to bring claims for which no qualifying length of service is required, such as discrimination if it can be established that dismissal was due to a protected characteristic and automatic unfair dismissal (if the principal reason for dismissal is, for example, pregnancy, whistleblowing, requesting time off to care for dependants etc.)
It is feared that the route to justice may be exploited by employees using such avenues to bring more speculative claims, causing a further (more complex) influx of litigation for the employment tribunal system to manage and resulting in further costs to the employer.
Despite the projections made by the Government, it is doubtful that the change in the qualifying period will save businesses £6 million currently spent on litigation as hoped. Critics have accused the coalition Government of diluting employment laws which have taken years to establish, especially in light of its recommendation to introduce “compensated no fault dismissals” for businesses employing 1 to 9 employees. Although the increase in qualifying service period to bring an unfair dismissal claim may encourage recruitment and promote pre-action conciliation, so workplace disputes are resolved without litigation, changes are not without pitfalls. How the change will affect the employers and employees as well as the burden on the employment tribunal system is yet unknown and only time will tell.
Further developments in the ever-evolving area of employment law are expected this year so watch this space.
In the interim, should you need help with employment planning in light of the forthcoming changes in employment law, including the increase in the qualifying period, or if you are an employee unsure of your rights, please contact David Johnson or Kaajal Nathwani.