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Qualifying period for unfair dismissal protection is increased

Published 14 April 2012

The biggest change to employment rights for 2012 is undoubtedly the increase of the qualifying period for an employee to bring an unfair dismissal claim from one year to two years of service.

The government says this is part of its drive to give employers the chance to “try out and test” new recruits without the fear of unfair dismissal claims.

The Government’s take on this is that the changes will give more time for employers and employees to resolve difficulties and give employers greater confidence in taking on people whilst easing the burden on the employment tribunal process.

However, although this will give employers a lot more flexibility (and in effect they will be able to dismiss someone 1 year 11 months after employing them), my view is that it could make employers somewhat complacent and not follow process or procedure correctly. This could then create the potential of more complicated and more expensive cases at a tribunal because an employee will have to argue some kind of discrimination in order to bring a claim.

Since the introduction of the Equality Act there is a lot of scope for the employee, and many used the discrimination plea when the two year qualifying period was introduced previously.

This change was introduced by Margaret Thatcher back in 1985 and proved at the time to decrease unfair dismissal cases but increase discrimination claims, which are more complicated and costly and do not have a qualifying period.

The law was reduced back to one year in May 1999 partly because of a legal challenge at the House of Lords, which held that the two year increase was potentially indirectly discriminatory against women.

The TUC has come out against the changes, saying they could affect 2.7 million people. Brendan Barber, its secretary general said the changes could introduce a "hire-and-fire" culture, and that there was no evidence that the one-year limit caused job losses or hurt recruitment. He also claimed the new rule would discriminate against young people, women who work part-time and workers from ethnic minorities.

So what should businesses do to avoid any action by employees? Firstly, they will need to continue using probationary periods effectively to monitor and test new employees. They will also have to continue to adopt a fair procedure when terminating employment and continue to be vigilant to avoid possible discrimination pitfalls.

The government says it hopes the reform will assist businesses and boost economic recovery, with an annual saving of £15.8m to 20.1m to UK businesses. Only time will tell if the figures add up and who the real losers will be.

Mark Ferron
Castle Associates

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