Unfair Dismissal:Is Two Years Too Long?

The coalition government plans to change the qualifying period, before an employee can claim unfair dismissal, from one to two years, in April 2012.

Vince Cable, Secretary of State at the Department for Business Innovation and Skills, said yesterday:

‘’The aim of increasing the qualifying period is to give greater confidence to employers in recruiting new employees, without undermining workers’ sense of job security at a time when consumer confidence is low.’

But he can’t have it both ways. Making it easier for employers to dismiss inevitably reduces employees’ job security.

The government estimates that this will reduce the number of employment tribunal claims by 2,100 to 3,200 year, representing 4% to 7% of all unfair dismissal claims. This is small beer, with unfair dismissal claims already down by around 10,000 (17%) over the past year. Employment tribunal statistics show that there are fewer unfair dismissals claims than there were ten years ago.

The qualifying period for unfair dismissal claims has changed often over the years: from two years to six months to one year. The period was reduced to one year in 1999 after the House of Lords held in R v Secretary of State for Employment ex parte Seymour-Smith (No, 2) 2000 ICR 244 that a two-year qualifying period was justified indirect sex discrimination. The legitimate aim was to encourage employers to recruit more employees.

More recent figures show that disparate impact on women generally is harder to establish. The impact assessment shows that (mostly female) part-time, young and non-white employees are less likely to have two years’ qualifying service. Whether such disparate impact is objectively justified only the courts can say.

The government has ruled out extending the qualifying period only for small firms, on the basis, first, that small business is not disproportionately affected by unfair dismissal rules and, secondly, that the benefit of the two-year period should apply to all businesses.

Claimant solicitors will be alert to pursue other claims, where ‘normal’ unfair dismissal is no longer available. Unfair dismissal claims can be brought with no qualifying period where dismissal is for various prescribed reasons, including making a protected disclosure; and discrimination claims can also be brought from ‘day one’.

Will making it easier to sack people create more jobs or more unemployment? Will lack of employment protection for two years make staff more reluctant to move, reducing job mobility? The government has promised to monitor the impact, but clear evidence seems unlikely.

What of justice? ‘…justice in the tribunals (and in the courts) is not a war, or battle, or a game….it is (or certainly should be) a reasonable, sensible and civilised way of sorting out disputes that the parties have unfortunately been unable to sort out themselves.’ Lord Justice Mummery in Gayle v Sandwell & West Birmingham Hospitals NHS Trust [2011] EWCA Civ 924 CA. There will be more disputes without legal remedy.

Geoffrey Bignell

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