Latest news and Articles

OCTOBER 2011

On 3 October 2011, the Chancellor of the Exchequer delivered a speech confirming a number of controversial employment law reforms. The changes are part of the Coalition Government’s ongoing employment law review.

Unfair Dismissal

The Chancellor announced that the qualification period (continuous employment) for employees to have the legal right to make unfair dismissal claims in the Employment Tribunal will increase from one year to two years from 6 April 2012. The current two year period has been in place for many years.

No details have yet been given as to how this change will be implemented and how those employees who may have already achieved one (but not yet two) years’ continuous employment with an employer by 6 April 2012 will be affected by the change. This could be dealt with by transitional procedures enabling those employees to retain their current right to claim.

The Chancellor asserts that the change to the unfair dismissal rules could save British business nearly £6 million a year and could reduce the number of unfair dismissal claims by around 2,000 a year. Experts in the field have challenged these statistics, particularly the reduction in claims figure.

This proposal has come forward very rapidly with minimal consultation and it is not clear whether the adverse impacts of both proposals, on both employees and on businesses, have been fully considered.

Undoubtedly, it will give employers the ability to dismiss employees with less than two years’ service without having to justify the reason as fair or follow a fair procedure, under the ACAS Code of Practice 2009.

Some commentators consider that although the number of unfair dismissal claims may decrease to a limited extent, there is a strong possibility that there will be an increase in the number of discrimination and other claims, since there is no qualifying period for bringing a discrimination claim and some other claims. The removal of the right to complain about unfair treatment is likely to mean a much more careful scrutiny by employees and their advisers of the facts, circumstances and reasons for an alleged unfair dismissal to consider whether, for example, it was tainted in any way by discriminatory treatment or victimisation of the employee. Employees with less than two years’ service will not be able to claim that their dismissal was unfair, but might instead allege that their dismissal was discriminatory, where there is a basis for that.

This may not have been considered, as it will result in businesses still having to spend precious management time defending costly discrimination allegations and claims, rather than unfair dismissal claims.

Employment Tribunal Fees

The Chancellor also briefly mentioned that he intends to introduce the payment of fees, eg by a Claimant on the lodging of a claim, in the Employment Tribunal. There has been no further official announcement as to the details of any such tribunal fees. A consultation on the fees which will be charged and how they will be paid will be started by the end of November. We will be keeping a close eye on these developments and how they will affect both employers and employees, so watch this space.

Alison Downie
Head of Department & Partner

If you would like any further information about any of the issues raised in this article please contact Alison Downie (adownie@gdlaw.co.uk) or any other member of Goodman Derrick LLP’s employment team on 0207 404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice