The Government announced this week that the unfair dismissal qualifying period is set to increase from one year to two years as of April 2012. This announcement comes as a taster to the Government's formal response to its consultation, "Resolving Workplace Disputes" which was published in January this year (2011).
Further changes include the introduction of Tribunal fees in a bid to prevent vexatious claims. Although the level of fees will be the subject of consultation in November, it is likely that these will come into effect as of April 2013. Current reports speculate that these could be as follows;
- Lodging ET1 – £250
- Hearing Listed - £1000 payable by Claimant
- If claim value over £30,000 – higher fees
- Fees to be refunded if Claimant wins
- Fee waivers for those on low incomes.
What does this mean for employers?
The good news
The introduction of fees will hopefully come as a big disincentive for employees to bring weak or frivolous claims and the increase in the qualifying period for unfair dismissal claims will hopefully provide an incentive for employers to take on staff and boost productivity and growth without the fear of claims.
The bad news
According to the CIPD, these changes may run the risk of reinforcing a hire and fire culture in UK workplaces, which may be detrimental to fostering a culture of genuine engagement and trust between employers and their staff.
Further, it may encourage more employees to try and bring discrimination claims, for which no qualifying period of service is required.
The Tribunal fees may also put off poorer claimants, but the Government has yet to clarify whether allowances will be made for claimants on low incomes.
Practical points
It is interesting that the increase in the qualifying period for unfair dismissal has almost doubled and is now equal to the qualifying period of service for a redundancy payment. Will this mean that employers will find it easier and more cost effective to lay off employees without the need for redundancy payments or the fear of an unfair dismissal claim?
Also, will this have a knock on effect on the number of age discrimination claims, with younger employees more likely to have less service and the possibility of facing dismissal early on in their careers?
The Government hopes these reforms will change the landscape of employment litigation, reduce the number of Tribunal claims and boost the economy. Again, we will have to simply wait and see.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.