07/10/2011

Employment e-Brief – employment law reforms or a retrograde step?

After months of speculation, the Chancellor has confirmed that the qualifying period for unfair dismissal claims will be increased from 1 year to 2 years from April 2012. The Government clearly hopes that this 1980s revival will be welcomed by employers. However, we suspect that there were few party poppers going off around head offices.

For many employers, this will cause more problems than it solves. An increase in ‘special’ unfair dismissal claims with no qualifying period and, discrimination claims seems inevitable. This will drive up the complexity and the cost of Tribunal litigation. The introduction of fees for Claimants will not prevent the professional timewasters, who will in the main, have no declared income and therefore will still pay nothing.

Cynics will no doubt see this policy change as a vain attempt to distract attention away from the failure to deliver on the promise to reduce the administrative and legal burdens on employers. Some commentators have pointed out that it has been proposed mainly because it only requires secondary rather than primary legislation. Certainly, there are other measures which would be of more practical and immediate help to employers without significantly reducing the protection afforded to the most vulnerable groups of employees.

Many will remember that the old 2 year qualifying period was challenged during the late 1990’s in R v. Secretary of State for Employment ex parte Seymour-Smith and Perez. The House of Lords held that it was indirectly discriminatory against women who were more likely to have shorter periods of service. However, the Government successfully argued that the 2 year qualifying period was objectively justified as it encouraged employers to recruit more employees.

This time around it is young people who may feel the effects most keenly. At a time when youth unemployment is already reaching a record high, coupled with the abolition of the default retirement age meaning that jobs are not necessarily being freed up at the other end, this policy seems misguided at best. It will be interesting to see if anyone takes up the challenge on their behalf.