House of Lords Set to Approve Two Year Qualifying Period for Unfair Dismissal

Two small but controversial changes to employment law are expected to pass their final parliamentary hurdle next week, when motions that the “Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012” and the “Employment Tribunals Act 1996 (Tribunal Composition) Order 2012” “be approved” are moved by Lord De Mauley in the House of Lords.

The House of Commons, having debated these Orders in  Committee earlier in the month, approved them on Monday of this week  (19th March 2012).

The House of Lords debate in its Grand Committee took less than two & a half hours, with contributions from a previous chair of ACAS, director-general of the CBI, general secretary of the TUC, and experienced members of employment tribunals (many of whom spoke against the Orders). When the vote is taken next week, the informed 2½ hours of debate will have preceded changes to employment law that will require all new employees (appointed from 6 April) to have two years employment before they have the right provided under section 94 of the Employment Rights Act 1996 not to be unfairly dismissed, or to be given reasons for their dismissal afforded by section 92 of the Act, while a tribunal determining unfair dismissal cases could consist of an Employment Judge sitting alone – without lay members.

Although making dismissal easier in theory, there is a real possibility that employees dismissed in their first two years of employment will seek alternative options to bring an employment tribunal claim, typically adding a variant of discrimination – which absolves the need for any minimum length of service – to the claim. If these claims are brought unreasonably & successfully defended, the employer may be able to recover some of their costs against the claimant, but in many cases finding a negotiated settlement could be the cheapest commercial option. Employers are therefore advised not to see these changes as a free-for-all to hire & fire at will, but to continue following best HR practices, and having clear, demonstrable & documented reasons for dismissal. If you need help with any of this, get in touch for assistance.

 

Update (27 March): Labour have laid amendments against both motions, not opposing the Orders, but to state that they are being passed “with regret”, and calling on the Government to report on the effect of the changes in 18 months time.

If the amendments are approved, the motion that the Order to amend the Employment Tribunals Act 1996 (Tribunal Composition) Order 2012 would include:

“but that this House regrets that the Order will risk the reduction of justice and fairness at Employment Tribunals, is opposed by both trades unions and employers’ organisations, and risks increasing costs through a greater number of appeals; believes that having an employer and employee representative on Employment Tribunals remains the right way to ensure a fair and just decision and process for claimants; and calls on the Government to place a report into the effect of the changes before Parliament, 18 months after the approval of the Order”

with similar language proposed for the motion to approve the Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012:

“but that this House regrets that the Order will unnecessarily diminish the employment rights of employees, will have little or no effect on employers’ likelihood of taking on new staff, encourages the use of dismissals in place of good management practice, and is opposed by trades unions; believes that employees should always get a written reason for their dismissal; and calls on the Government to place a report into the effect of the changes before Parliament, 18 months after the approval of the Order”.

Filed under: Employment Tribunals, General News, Laws & Regulations by Employment Law Clinic           Post created on: March 23rd, 2012