The Chancellor, George Osborne, in this week’s speech at the Conservative Party Conference announced 2 significant reforms to current Employment Law, including:
- from 6 April 2012 increasing the length of service an employee must have before bringing a claim for unfair dismissal from 1 year to 2 years; and
- workers having to pay fees in order to bring a claim at the Employment Tribunal. Although the exact detail of how this will work has not yet been provided it has been stated that the fees will be set at £250 to lodge an application and £1,000 payable when the hearing is listed; both of which could be increased in the event that the value of the claim is over £30,000.00. However, where the claim is successful the fees will be refunded, and claimants with insufficient means will have the fees waived.
Purpose of the reforms
Such changes to the law have been made in an attempt to discourage speculative claims being made in the Employment Tribunal. The Government claims that the reforms will save UK
Potential consequences
Several issues may arise out of these changes to the law.
Firstly, in relation to how the fees will be waived, if the test for a fee-waiver is simply that they need to be in receipt of income support, then most ex-employees will automatically qualify for the waiver, but those still in work would be required to pay. Such a policy could therefore arguably be seen to encourage individuals to remain unemployed, rather than attempt to mitigate their losses and find employment elsewhere.
Secondly, in relation to the increase in qualifying time, there has been some discussion as to whether this will actually reduce the number of claims being made at the Tribunal. Individuals with less than 2 years service could seek to bring a claim under alternative jurisdictions (e.g. under discrimination legislation), where no service requirement exists. Furthermore, there may also be a sharp increase in employees resigning and bringing constructive dismissal claims in the lead up to April 2012 in circumstances where they have between 1 and 2 years service and believe that they will be dismissed shortly after the reforms come into force.
Lastly, there has been some concern that the reforms will encourage employers to maintain a high turnover of staff, providing employees with less job security, so that they are unable to qualify to bring a claim for unfair dismissal.