Harriet McInnes

Harriet McInnes - The unintended consequences of the government’s unfair dismissal plans

Thursday, January 19, 2012
6:30 AM

In a bid to reduce employment law red tape, the government is proposing to double the qualifying period for bringing unfair dismissal claims and require would-be claimants to pay fees to lodge claims.

But, the proposals are unlikely to result in a significant reduction in the number of employment tribunal claims overall as aggrieved employees may link unfair dismissal claims with other discrimination claims.

So are there any unintended consequences?

From April, the qualifying period for an employee to be eligible to bring an unfair dismissal claim is expected to be extended from one to two years. On the face of it, this should lead to a reduction in claims raised by employees in their first years of employment and is intended to provide greater flexibility to employers in managing their workforce, including the ability to employ staff on fixed-term contracts of 12 months’ or more.

However, there are a whole range of claims employees can pursue without requiring any qualifying period of service. These include unfair dismissal claims where, for example, the employee alleges that they were dismissed for raising a health and safety concern at work or for whistle blowing – which can be made from day one of employment.

In addition, the Equality Act 2010 arguably widened the net in respect of the categories of employees who are protected under anti-discrimination legislation (regardless of length of service), and an employee who is dismissed could claim discrimination if they consider that their dis-missal is because of sex, race, disability, religion or belief, sexual orientation, gender reassignment, marital or civil partner status, pregnancy or maternity, or age.

One unintended conse- quence of the increase in the qualifying period of service to bring an unfair dismissal claim could be that aggrieved employees with less than two years’ employment may, instead, seek to bring a discrimination claim.

Accordingly, although the number of unfair dismissal claims may go down, the number of discrimination claims may go up.

In an attempt to deter vexatious employees from bringing ill-founded or unmeritorious claims, the government is also proposing to introduce fees to lodge a claim at the employment tribunal. The fees, currently subject to consultation, could be as much as £250 to issue a claim (with a further payment of up to £1,250 when the claim is listed for a hearing).

The government has suggested that the fees may be subject to an income threshold, so employees who do not have any income will not have to pay. Given that a large proportion of claims relate to dismissals, this may substantially reduce the impact of the proposal.

A new concept of ‘protected conversations’ has also been suggested by the government.

In short, the proposal is that employers should be able to sit down and have a frank conversation with an employee about their performance and/or their retirement plans without the risk of that conversation being used by the employee to pursue litigation. This is a simple idea but how this would work in practice is questionable.

Further employment law reforms include making pre-claim conciliation compulsory, so that ACAS are involved in helping to settle a possible claim before the employee can bring an employment tribunal complaint. In addition, there appear to be plans afoot to create a concept of “no fault dismissal” for employers employing less than 10 staff.

Both of these would be great news for businesses, and may have a significant impact on the number of tribunal claims brought and the management time and costs incurred in defending them.

Unfortunately, save for the increase to the qualifying period of service for employees to be eligible to bring unfair dismissal claims, the government has not confirmed when (if at all) the other proposals will be introduced.

Harriet McInnes is an employment law specialist at Howes Percival.