Unfair dismissal qualifying period

People Newsletter (Spring/Summer 2012)

• Unfair dismissal qualifying period
• On your marks, get set, go! Get ready for the Olympics
• The price of injured feelings
• Franchising TUPE obligations?
• Seldon - the pensions issues
• Making employee ownership mainstream

With effect from 6 April 2012  the minimum qualifying period of continuous employment for the purposes of claiming unfair dismissal has been doubled to two years.   This is a key policy decision in the currently highly politicised arena of employment rights.

The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 affects all employees starting work on or after 6 April 2012.  Its effect depends upon your perspective – whether you are an employer or an employee.  Since most managers and HR professionals wear both hats, there is plenty of potential for mixed emotions in respect of this change.

For an employer, there is greater scope for assessing the performance of an individual employee and allowing a longer period for development.  Prior to this change an employer would need to consider dismissing a less than satisfactory employee prior to the anniversary of his or her recruitment.  To delay risked later having to follow a more structured performance management programme or disciplinary procedure prior to any dismissal in order to be assured of having a reasonable defence to an unfair dismissal claim.  Following the change, the pressure to make a decision to dismiss before the employee gains unfair dismissal rights, is moved back to the second anniversary of recruitment.  An employer may therefore reason that the change is more likely to preserve jobs and reduce the risk of recruiting staff who subsequently turn out to be unsuitable.

For an employee, this change means that you can be thrown out of work at any time before the second anniversary of your recruitment for any minor mistake or for no good reason at all.  The employer is not even under an obligation to explain why you have been sacked.  If you suspect that you have been discriminated against because of a protected characteristic such as your gender or race, then you can still make a claim to an Employment Tribunal.  But if your boss is unreasonably demanding or just does not like you for some reason, you can be deprived of your livelihood with no right of redress.  This seems more likely to ensure that anyone with less than two years' service feels extremely insecure in work and therefore less likely to want to spend or invest in the economy.  Also anyone thinking of moving to a new job will be mindful that it will now take two years to acquire the statutory right not be unfairly dismissed.

The rationale for this change is said to be to encourage employers to recruit and to stimulate growth.  The evidence that this change will achieve that aim is however, currently thinner than Vince Cable's hair.  As Dr Cable himself said, in response to other employment reforms proposed by Conservative pin-up boy Adam Beecroft – "it is not the role of Government to scare the wits out of people".  This demonstrates that it is not just managers and HR professionals who wear two hats in this debate, it is also the Secretary of State for Business, Innovation and Skills – coalition partner to the Conservatives and Liberal Democrat MP mindful of the pasting his party received from the electorate in the recent local elections.

Richard Kenyon is a partner and Head of the Employment and Pensions Group at Field Fisher Waterhouse LLP.