At the last Conservative Party conference, George Osborne announced the Government's intention to introduce two new significant pieces of employment legislation both of which would have a major impact on an individual's ability to bring a claim before an employment tribunal. Aimed at stimulating UK business, the proposed changes are designed to encourage employers to recruit more employees by withdrawing the fear of claims. The new legislation forms part of the Government's much publicised policy to help small businesses in particular and generally, to encourage growth in the economy.
George Osborne stated "We respect the right of those who have spent their whole lives building up a small business not to see that achievement destroyed by a vexatious appeal to an employment tribunal" and declared that the two intended changes would "… make it much less risky for businesses to hire people".
So what are the two proposals? The first is to increase the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years and the second is to introduce fees for lodging employment tribunal claims thereby transferring the cost burden of such actions from tax payers to the users of the system. Fairly radical stuff it seems but if the proposals are introduced from April, 2012 and April, 2013 respectively, as planned by the Government, what will be the likely outcome?
Extending the qualifying period will no doubt reduce the number of claims made but will the legislation increase the number of jobs being created? The TUC certainly thinks not and considers it likely that the immediate effect will be an increase in the number of dismissals. Similarly, many economists believe that in the long term any positive effect on hiring employees is likely to be completely offset by a corresponding increase in the rate of dismissals. Perhaps not the way to boost growth and jobs in the UK?
Economic considerations apart, if the legislation is to be introduced, the bright lawyers among us will immediately ask "How will it be introduced?". Will the new legislation apply only to those employees hired after April 2012 or those employees in employment with less than one year's service as at April, 2012? Will the Government have to introduce some form of transitional provision, as with the introduction of new retirement pension legislation, in order to deal with those employees who have more than one year's service but less than two years, by April 2012? Surely that must be the case as to not do so would mean that particular group would immediately lose their unfair dismissal rights.
The proposal for the introduction of application fees from April, 2013 is equally controversial. Consultation is to take place as to the exact charging structure and regime, however it appears that the fee for bringing a claim to the employment tribunal will be in the region of £250 to lodge the ET1 claim form and a further fee of circa £1,000 payable by the claimant when the employment tribunal lists the claim. There is also a suggestion that a higher fee may be payable if the amount claimed is in excess of £30,000. Some analysts predict that with the introduction of the application fees this will drastically reduce the number of unfair dismissal claims made and will thus reduce the current burden upon the tax payer. Others refute that cry as the Government has expressed its intention to consider the introduction of fee waiver and fee reduction for those claimants who are low paid workers and those without an income. There is the rub. If being on income support is sufficient to qualify for a fee waiver or a fee reduction then surely the majority of applicants will, as ex-employees now unemployed, satisfy the test.
The devil will be in the detail of course and we await further announcements from the Government but with the Trade Unions and Civil Rights groups on one side of the fence and the CBI and other business groups on the other, I suspect that we face a spring (or springs?) of discontent?
