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Planned Changes to Unfair Dismissal Rights

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The Government has confirmed that the qualification period for the right to claim unfair dismissal will be extended from one to two years from 6 April 2012.

The proposal was one of the reforms suggested in the ‘Resolving Workplace Disputes’ consultation, which sought views on a variety of proposals aimed at removing barriers to business growth in order to ‘create the conditions which allow businesses to flourish and expand, by reducing regulation and maintaining a flexible and dynamic labour market’.

The rationale behind the change is that by extending the qualifying period it will be much less risky for businesses to take on staff.

The Government estimates that the change could save British businesses nearly £6 million a year. It also predicts that the number of unfair dismissal claims will drop by around 2,000 a year. In the year 2010/2011, there were 47,900 claims for unfair dismissal.

The change will not impact on the right of employees to claim unfair dismissal where the reason for dismissal is one which is ‘automatically unfair’. A dismissal is ‘automatically unfair’ where an employee is dismissed for exercising or trying to exercise one of their statutory employment rights, for example if they are dismissed by reason of pregnancy or for ‘whistleblowing’.

The Government is also seeking ways of speeding up the Employment Tribunal (ET) process and tackling weak and vexatious claims. To this end, it intends to introduce a fee for bringing an ET claim. Successful claimants would have their fee refunded. Employees who have left work and are claiming benefits are likely to be exempt, however. The Ministry of Justice (MoJ) recently held a consultation on the proposed fee levels: the consultation document can be downloaded from the MoJ website.