Thursday, October 13, 2011

Change Proposed to Law on Unfair Dismissal

The Government has confirmed two key employment law changes, announcing that the qualifying period for unfair dismissal claims will increase from one year to two and that employees may be asked to pay a fee to bring a tribunal claim.

From April 2013, employees will be asked to pay £250 to apply for a Tribunal, and a further £1,000 if a hearing is granted. The money will be refunded if they are successful, but is forfeited if they lose.

The Government has said that "poor claimants" will not have to pay, although there is currently no detail as to how a claimant qualifies as "poor”.

John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development, suggested that there is "questionable merit" in the changes. He said, "It is unlikely that raising the threshold from one to two years will have its intended effect of reducing the number of employment tribunal claims because employees are increasingly bringing claims linking unfair dismissal with discrimination claims, which can be made from day one of employment.

Office of National Statistics figures suggest that only an extra 12% of employees would potentially be denied the chance to claim unfair dismissal due to length of service as a result of the change. This is hardly likely to make much of a dent in overall tribunal applicants given that only a small proportion of these would make any claim."

This change in legislation is going to create a huge new administrative burden for the tribunal system. Collecting fees from upwards of 100,000 people is a huge task, as will be refunding fees to successful Claimants. The Tribunal Service is currently not set up to do this and additional resources will be needed to put the right systems in place at a time when government is making deep cuts into costs.

Presumably, the requirement to pay a fee will not be levied on claimants who are unemployed and cannot afford it. In which case, relatively few claimants will actually have to pay the fee. That's the thing about people claiming unfair dismissal - they tend to be unemployed.

The changes are due to become law in April 2013.

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