Beware: the two year qualifying period will take affect for new employees only

31st January 2012

Beware: the two year qualifying period will take affect for new employees only

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One of the most publicly announced reforms in employment law coming into force on 6th April 2012 is the increase of the qualifying period to claim unfair dismissal from one year to two. We commented on this last year

However, there has been a bit of news on this change. A number of organisations including IDS and Expert HR have stated that the Department of Business, Innovation and Skills has confirmed to them that the increase will only apply to employees who commenced employment on or after 6th April 2012. For those who commenced before that date, the one year qualifying period will still apply. So, for example, an employee who commenced employment in December 2011 will have a right to claim unfair dismissal, if dismissed in May 2013.

Whilst the increase in the qualifying period has received a lot of publicity, the fact that it will only apply to new employees hasn’t. This will no doubt be publicised nearer 6th April, but we are concerned that a number of SMEs will miss this crucial bit of information. Come 6th April, lured into a false sense of security, many employers may unfairly dismiss employees who have over one year length of service but not two.

The Government has also announced plans to curb executive pay by giving greater powers to shareholders to control remuneration. Vince Cable announced these changes in the House of Commons last week and though he encouraged employee participation, it will not become part of the legislation. This announcement comes in the same week that the main shareholder (the Government on behalf of the UK) allowed the Chief Executive of RBS to be awarded £963,000 in shares. While he has agreed to waive the bonus, according to the BBC News website, yesterday, the government has said it will not block other bonuses to RBS executives. “We are not going to micro-manage bonuses,” a Downing Street spokeswoman told the BBC.

It is very hard to know what to say about this conflict between behavior and stated intent, but it clearly doesn’t give this proposed plan a very good start.

Finally, as of 1st February, the new compensation limits come into force. This is an annual change in the compensation limits. This year, the amount of a week’s pay for calculating statutory redundancy pay and unfair dismissal basic award has risen to £430 and the maximum in the compensatory award will increase to £72,300.

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