Unfair dismissal qualifying period increase - what would the change mean?

Peninsula Team

February 11 2011

As part of their economic growth strategy the Government has recently announced consultation on important reforms to employment law which include, amongst other measures, increasing the qualifying period before employees can bring a claim for unfair dismissal from one to two years. The length of service employees needed to qualify for unfair dismissal rights has changed over the years. From 1985 to mid-1999, employees needed two years’ service to qualify for the right, but the current law states that an employee must have one year's continuous employment with the same employer to qualify for unfair dismissal protection. The proposal to increase the qualifying period has triggered predictably diverse reactions from those who represent potentially affected parties. The reforms have been broadly welcomed by employers’ organisations. John Cridland, the CBI's Director-General Designate, said: "Extending the qualifying period for unfair dismissal is a positive move that will give employers, especially smaller ones, the flexibility and confidence they need to hire." Unsurprisingly, the Trade Unions views on the proposal are less supportive. Bob Crow, general secretary of the Rail Maritime and Transport Union, said: "You will have to wait two years for protection under the law with these plans and that's a green light for workers to be dumped out on the cobbles just before they get their 24 months service under their belts." The Chartered Institute of Personnel and Development comment has been that increasing the period of time before staff can claim unfair dismissal from one to two years' service is unlikely to have a major impact on the number of tribunal claims because many claims for unfair dismissal are also linked to discrimination claims which are not limited by employees' length of service. They have also expressed concern that there may also a danger that the two-year threshold might be held to be sexually discriminatory - as the turnover rate for women is higher than that for men. Employment Relations Minister Edward Davey said: "At the moment, if an employer wants to dismiss an employee - and not get taken to court for unfair dismissal - they have to do that within a year and that sometimes ends up with them dismissing someone rather earlier than they would have done," he said. "By moving the period to two years it would actually give a chance for that employer-employee relationship to develop and to cement, and we think that's good for jobs.” The change, if it happens, would in all likelihood be good news for businesses who will have a further period of time in which to assess the suitability of employees without triggering unfair dismissal claims. The proposed change could be of assistance to employers particularly in genuine redundancy situations where they currently need to show that certain procedures have been followed to defeat an unfair dismissal claim – consultation, consideration of suitable alternative employment, fair and objective selection. Despite this, it is important to note employers will still not be able to be complacent with regard to how they treat their employees. Employers can still face allegations of discrimination such as whistle blowing and Trade Union related dismissals. These cases are often more expensive to defend than unfair dismissal and this could lead employers to question whether the Government’s proposals have gone far enough. For more information on the proposed changes outlined above, or any other employment law issues, contact the 24 hour Advice Service on 0844 892 2772.

Suggested Resources