Posted on 22.3.12 by David Walton
Barely a day goes by without further news about government plans to change our employment laws. Employment regulation has featured highly in the government’s ‘Red Tape Challenge’, and Vince Cable has announced a mass of proposed reform last November.
The government’s thinking is that by making it easier for businesses to hire, manage and dismiss staff, they will be encouraged to recruit, thereby boosting the economy. But is this realistic and, amidst all the rhetoric and headlines, what should employers really be looking out for on the employment law horizon?
The most imminent actual reform will come into force on 6th April 2012. From this date, the qualifying period that an employee must have worked in order to make an unfair dismissal claim will increase from one to two years. This change will only apply to new employees, recruited on or after 6th April, with those already in employment retaining their current one-year qualification.
After the current one-year qualification was introduced (down from two), back in 2000-2001, the number of unfair dismissal claims increased by 20%, so can we all expect that the number of such claims now will reduce by a similar proportion?
Whilst only time will tell, the prospect is doubtful.
Claims of discrimination and certain categories of unfair dismissal are not subject to any qualifying period, and given that a ‘claims culture’ is perhaps now more entrenched than it was 10 years ago, it will come as no surprise if future employment tribunal statistics are untouched by this much-heralded reform. We could also see an increase in discrimination cases and attempts to pursue claims in the limited categories which do not need any period of qualifying service.
The other definite changes happening in April relate to refinements to the employment tribunal system, such as an increase in the amount of costs that can be awarded, witness statements being taken as read, power to order a party to pay witness expenses and tribunal judges being able to sit alone in unfair dismissal cases.
There is no doubt that these measures should help ease the burden on administration, but they are not likely to have any direct impact on employers or deter claims.
However, these April changes are only the start. Just last week, the Department for Business Innovation & Skills published a call for evidence dealing with dismissals and ‘compensated no-fault dismissals’ for micro businesses.
This process adds to the list of consultations that are already in hand on things like introducing tribunal fees, ‘protected conversations’, compromise agreements, TUPE, collective redundancy consultation and a rapid resolution scheme for more straightforward claims.
But the question remains, will all this change really give employers the confidence to create more jobs?
With the majority of changes not expected to come into force until 2013 or beyond, there is no immediate impact. In the meantime, employers are left bemused and bewildered by more headlines and another raft of proposed change in employment law. Perhaps the root of poor employer confidence is not the system itself, but the fact that in the last few (and it seems in the next few) years there are so many changes.
How can the government expect employers to recruit with confidence when they keep moving the employment law goalposts?