Thread: Osborne announces Employment Law Reforms

Changes to unfair dismissal rules which could save nearly £6 million a year for British business have been announced today by Business Secretary Vince Cable and Chancellor George Osborne.


Today’s decision will see the qualification period for the right to claim unfair dismissal extended from one to two years. This will come into force on 6 April 2012. This is the latest development in the Government’s workplace reforms which aim to increase business confidence to take on more workers.

News : NDS

Does anyone think that this is a good or bad idea?

Hi Prof Peach

I first started working in HRM in 1999 just as the qualification period changed from 2 years to 1 year, so I haven't really had any experience working or advising around a 2 year rule but I do have some thoughts ..

My first thought is that a reduction of 2000 tribunal cases a year is a mere drop in the ocean (£6 million saving) so I don't believe the government is able to justify the increase on this basis alone. I'm also a little sceptical about how the increase will help the economy to grow as businesses will be encouraged to take on more staff. Does anybody work for companies that are too scared to employ people because after 12 months they could claim unfair dismissal? This change is simply a green light to employ staff for one year and 11 months before getting rid of them.

Currently, there is no upper limit on the service needed to claim discrimination or whistle blowing unfair dismissal claims so I think we might see more claims of this nature, spurious or not, although the tribunal fees may limit this. As these types of claims carry no upper compensation limit, could we see more payouts?

I would also be interested to see if this increase is challenged on the grounds of age discrimination. Those with less service are more likely to be younger employees and we didn’t have age discrimination laws before 1999 when it was 2 years. Also those with lesser service are quite likely to be women = sex discrimination.

From a HR practitioner perspective, I think employers will be less focussed on dismissing poor performers early on. With the 12 month rule, we are all conscious of the clock ticking and more likely to invoke performance management procedures well before this time. The more sensible organisations will quite rightly use the probationary period to terminate those employees who aren’t quite up to standard around 6 to 9 months. Having the extra year is likely to delay performance management problems for longer than at present.

I’m really interested to hear everybody else’s thoughts…