Unfair Dismissal Qualifying Period
Lord Young agrees that the Government will consider increasing the qualifying service required for unfair dismissal to 2 years.
The Government has announced a series of measures to help the 5 million small businesses in the UK. They have issued a document called Backing Small Business. It can be found at: http://www.bis.gov.uk
The document sets out a number of steps they intend to take, including supporting start ups, improving access to finance and opening up government procurement. All of which are well needed and will no doubt be well received.
The document also goes on to say that Lord Young will look at how to make Government more small business and start up friendly, in addition, he will continue to carry out an ongoing review of, amongst other issues, employment law. Earlier this week, talking on BBC Radio 4’s Today programme, Lord Young agreed that the government would consider raising to two or three years the qualifying service required for ordinary unfair dismissal claims as part of that report. Lord Young will report back to the Government by spring 2011.
The qualifying period for ordinary unfair dismissal was reduced from two years to one in June 1999. TUC General Secretary Brendan Barber said:
‘There is no evidence that making staff wait for two years before they get protection from unfair dismissal will create any extra jobs.’ This quote is taken from the TUC web site: http://www.tuc.org.uk/workplace/tuc-18754-f0.cfm
Ordinary unfair dismissal is where the reason for the dismissal is not automatically unfair. Compensation for ordinary unfair dismissal is capped, currently at £65,300.
There are certain situations where the dismissal for a specific reason will be treated as being automatically unfair. The category of reasons which qualify for this special protection has been extended to cover a wide variety of different circumstances, including age, sex, sexuality, race, taking leave for family reasons, performing certain health and safety activities, performing certain functions as an employee representative under TUPE or the Collective Redundancies legislation, the making of a protected disclosure (blowing the whistle) and asserting a statutory right. There are many more reasons that qualify for this special protection. Compensation for automatic unfair dismissal is uncapped in many, although not all of the reasons and there is no qualifying period.
Every year, the Tribunal Service, which includes the employment tribunals, publishes its statistics. Usually, not a great deal changes from one year to the next. However, the 2009/10 statistics, which were published in June, show that there was a 56% increase in claims brought in the employment tribunals last year.
While it is true that raising the qualifying period for ordinary unfair dismissal will make it easier for businesses large or small to dismiss their staff, it will not make a significant difference to this rise in claims. Unfair dismissal, redundancy and breach of contract claims together only increased by approximately 17%. One of the biggest increases was in multiple claims, up by nearly 90%. These are claims where two or more people bring cases involving one or more type of claim, usually against a single employer. Typically, these cases arise from failures in collective consultation procedures, transfer of undertakings or equal pay claims. An increase in the qualifying period is unlikely to put that much of a dent in this type of claim. We wrote in more detail on the tribunal statistics in July and our note can be found on our news page on our web site: www.employease.co.uk
What is much more likely to happen is that lawyers will just get more inventive in claiming that their client’s dismissal amounts to an automatic unfair dismissal.
With the good use of probationary periods and disciplinary and redundancy procedures, employers do not need a short cut to dismissal. If employers operate their disciplinary and redundancy procedures correctly (and it is a good habit to do so) they should not be worried about the qualifying period remaining at one year.
It is to be hoped that Lord Young will not recommend a rise in the qualifying period.