Unfair Dismissal – The New Old Rule!

It cannot have escaped attention that tomorrow 6 April the qualifying period for claiming Unfair Dismissal will rise to 2 years.

Those of us that have been around for longer than we care to admit will recall that prior to 1999 this was the status quo.  The qualifying period was initially 2 years when the concept was introduced in 1972 and since then has been changed a number of times (in 1978 to 1 year, in 1980 to two years for employers with less than 20 employees, in 1985 to 2 years across the board).  Most recently it was reduced to 1 year in 1999 by the snappily entitled Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 1999.

The Government’s current rational for increasing the qualifying period is that for employers to hire staff they must feel confident about recruiting and if they do not feel confident about recruiting businesses will not grow.  However, this rather overlooks the fact that only four percent of Unfair Dismissal claims are brought by employees with less than two years service! It seems it’s not the facts that are important but the perception…

Inevitably there are conflicting views about whether increasing the qualifying period will have the effect of increasing employer confidence.  Even the Department for Business Innovation and Skills accepts that it is “difficult to quantify” whether increase in the qualifying period will have a commensurate increase on employers confidence to hire.  The Law Society’s view is that the increase may have the opposite effect – discouraging hiring out of fear that employees who are now unable to pursue Unfair Dismissal claims because they have insufficient service will bring discrimination or whistle blowing claims instead.

One can’t help but wonder whether increasing the qualifying period actually addresses the crux of the issue.  The Government is currently seeking evidence of whether current Unfair Dismissal procedures are too onerous and whether compensated no fault dismissals (for businesses with fewer than ten employees) should be considered.  Many debates surrounding the new qualifying period fail to acknowledge that procedures to fairly manage employee exits do not need to be unduly burdensome.  Yes there are hoops to jump through and traps for the unwary, but provided appropriate procedures are in place (and are followed) the majority of dismissals, whether after one or two years, should be procedurally fair.  It is interesting to note that according to the Department for Business Innovations and Skills, whilst 40% of employers indicate that demands of employment legislation discourage them from hiring, only 1% per cent make reference to relegations concerning dismissal or disciplinary action as being those that most put them off hiring.

In going back to “the new old rule” employers do need to give thought to their performance management procedures.  If an employee is not up to the job after nine months, they are unlikely to be up to the job after eighteen months and consequently if employers take prompt, fair and appropriate action either at the end of a probationary period or when issues arise at any time during the employment the question of one or two year’s service should not be the focus.