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There is an impression of political ping pong about this as the last time the qualifying period was changed was in 1999 when, shortly after Labour came into power, it was set at the current length of 1 year’s employment, Of course in the meantime the UK has been through a severe economic downturn against a backdrop of a world wide economic crises and such events are unsurprisingly going to cause the government to respond to demands from businesses to take certain steps such as this.
Hence the government’s announcement that the most recent change is to ‘create the conditions which allow businesses … to grow and expand by reducing regulation and maintaining a flexible and dynamic labour market’.
As employment lawyers, we often encounter employers’ frustrations with the current law relating to unfair dismissal, most commonly in situations involving performance management and long-term sickness absence. Employers wish to be able to deal with these matters as and when they first detect that the employee may not be as suited to the methods of production or working environment as they originally thought. Often employees turn out not to be what they purported or appeared to be when recruited.
Whilst the change will enable employers more time to assess the suitability of employees for a particular role, there is a danger that employers could inadvertently open themselves up to greater risk. This initiative will go some way to solving employers’ frustrations over the need for cumbersome performance management procedures in straightforward capability cases, but what about situations in which there are complaints of unfair dismissal or detriment on other grounds such as discrimination?
Where, for example, an employer dismisses someone within the first two years of employment, but that dismissal is related to a ‘disability’, an employee will still be able to bring a claim of disability discrimination. The risk is therefore that employers will act in a cavalier fashion, mistakenly believing there is no risk of any challenge.
Come April 2012, employers will still need to acquaint themselves with employment laws governing unfairness and discrimination in those areas where no qualifying period applies. In many situations the temptation to take advantage of the lengthened qualifying period may paradoxically expose employers to greater risk. This, perhaps, is an unforeseen consequence of the government’s initiative.
That said, when in 1999 the limit was decreased to 1 year, in the previous year only 92,000 tribunal claims were submitted. This compares with the 831,000 claims submitted in 2010-11 (22% of which were for unfair dismissal). The government estimates that increasing the qualifying period for unfair dismissal to 2 years could reduce the tribunals’ workload by up to 2,000 claims a year. Given the overall amount of claims submitted each year including unfair dismissal, this looks like a modest achievement.
The requirement of the payment of a fee before an employee can bring a tribunal claim, will in our view, reduce the number of vexatious ‘have a go’ claims. The real problem however is the costs regime. Generally in tribunals whatever the merits of their respective position the employee and the employer bear their own costs, and individuals can readily act for themselves thereby avoiding legal costs, In a real sense they have nothing to lose whereas the employer is put to the time and expense of defending the claim. No wonder employers often describe the process as being tantamount to commercial blackmail.
There is much speculation and comment as to how the government will structure the payment of fee arrangements; the fee may be repayable if a claim is successful and recoverable from the losing employer. However, the government has already said that the fee will not apply to those on low incomes. This rather undermines the initiative as the majority of unfair dismissal claimants are no longer employed – that is the very reason they are applying to the tribunal. Many claimants will be on Job Seekers Allowance and may not need to pay a fee at all. The final outcome of the further consultation will be nervously awaited. As ever, the devil will be in the detail.
Whilst the increased qualifying period of 2 years’ employment before an individual can bring an unfair dismissal claim will give greater commercial freedom to informed employers, the success of the fee system in reducing spurious claims really does depend on the exact structure and method of implementation.
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