Employing updated regulations

Dismissal rules set for shake-up, while the Government moots tribunal fees

Mary Clarke
Mary Clarke

In recent months there has been ­frenetic activity in the employment law arena. Barely a year since the Equality Act 2010 altered the face of anti-discrimination law in the UK, the Government has unveiled plans to overhaul employment law further still. It also plans to overhaul the ­Employment Tribunal (ET) system.

One of the most important changes, and the most imminent, is the proposal to increase from April the qualifying period for unfair ­dismissal. The effect of this is that employees will generally have to have two years’ service (instead of one) to be eligible to make a claim of unfair dismissal in the tribunal.

Although the Government believes increasing the qualification period will have a positive impact on ­business, the change is controversial because of its potentially discriminatory effect. It is unclear upon what evidence the Government is relying to show that the aims behind the rise are legitimate and proportionate.

Another potential impact of ­increasing the qualification period is that, instead of unfair dismissal complaints, employees will bring claims that do not require a qualifying ­period – for example, discrimination complaints. This may mean that employers will face more complicated claims.

In light of these issues employers would be well-advised to consider the circumstances of any dismissal of an employee of less than two years’ service carefully, to decide whether it is appropriate to follow at least a basic process before dismissing them. If any discrimination issues arise it is likely to be appropriate to carry out a full dismissal process.

Employers should be particularly cautious in cases of poor performance, where it may be relatively easy for an employee to frame a complaint on discrimination grounds.
April will also see the publication of a review of the ET’s rules of ­procedure. The aim is to create a more streamlined and efficient system with robust case management powers. This is to be welcomed. ­However, the relatively short period of time that has been allowed for the review to be completed raises ­questions as to whether or not it will achieve its purpose.

Another groundbreaking reform being introduced by the Government (albeit not until next year at the earliest) is a system of fee-charging in the tribunals. This has never been done before and marks a significant shift in culture in the tribunal system.

The Government is consulting on its proposals in this regard, which ­include two options. The first is to ­introduce both an issue fee and a hearing fee, which will vary depending on the nature of the claim. If ­introduced, this option would be ­implemented in 2013.

The second option involves an issue fee only, which would vary ­depending on the nature of the claim and the level of compensation being sought. If introduced this would take effect in 2014. For both options, the Government is proposing a remission system for individuals who meet prescribed criteria.

This type of fee-charging system is likely to be welcomed by employers. However, in practice it may present more problems than it solves. A ­fundamental and as yet unanswered question is how tribunals will equip themselves adequately to deal with a fees system.