Tribunal reform: good news for employers?

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Tribunal reform: good news for employers?

For some time now employers have felt that the pendulum had swung too far in favour of employees, making it is too easy to make claims in the Employment Tribunal.  This may have changed slightly as a result of the Government’s much-publicised proposed changes to the unfair dismissal rules.

What is changing?

The increase from one to two years in the qualifying period of employment will certainly give employers longer to decide whether an employee will “make the grade”.  However, in most cases, it should not take as long as two years to decide whether they are suitable for the role.  Probationary periods generally last for three or six months and have proved sufficient in the vast majority of cases.  What it will do though is give employers greater flexibility to reduce headcount if business conditions change and cost savings need to be made. 

Will it make a difference?

We think that overall it will reduce the number of Tribunal claims, although it is likely to increase the number of discrimination claims, which require no minimum period of employment. With this in mind, good practice dictates that employers will need to continue to follow full and fair procedures in dismissing staff.

You may remember when the qualifying period for making claims for unfair dismissal was reduced from two years to one  some time ago when the two year period was considered indirectly discriminatory against women who tended to have shorter periods of employment.  No doubt the statistics will once again be pored over to see whether this still applies, and this change may yet be challenged in the courts.

What should employers do pending 6 April 2012, the date from which this change will be implemented? 

  • If recruitment is being considered and employers wish to take advantage of this change, they should consider delaying the start of employment of new employees until after 6 April.  Transitional provisions have not yet been published but it is likely that the new rules will apply to new employees from that date. 
  • If there are employees with between one and two years of service whose conduct or performance is less than satisfactory and dismissal is being considered, employers may think that there will be an advantage in not making a decision until after 6 April 2012.  This is risky as the transitional provisions may protect employees who have already acquired the right not to be unfairly dismissed under the current rules.  It would also mean delaying taking action in relation to poor conduct or performance and this has potentially negative implications on the business and its other employees.

We will update you next year as soon as the transitional rules are published.

 

Published: 30 Nov 2011


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