I mentioned on Monday that BIS announced the increase from one to two years of the qualifying period for raising an unfair dismissal claim from 1 April 2012.  A second reform – the introduction of tribunal claim fees - was announced by Chancellor George Osborne at his speech to the Conservative Party conference.

Qualifying Period

The Government maintains this change could “save British business £6 million”.  Unions are not impressed, with the General Secretary of GMB apparently commenting that this reform will involve “deliberately stripping workers’ rights in order to facilitate the whims of the ‘predatory elite’”.

Clearly both sides feel extremely strongly.  Interestingly, though, the qualifying period for raising an unfair dismissal claim was previously two years over a significant period.  The Employment Protection (Consolidation) Act 1978 governed unfair dismissal for almost twenty years and for the most part provided for a two year qualifying period.  It was only in 1999 that this changed to one year.  So we are in fact going full circle back to the previous position.

It seems clear that a two year qualifying period will result in fewer claims.  It may though also lead to indirect sex discrimination.  Indeed, previous evidence has suggested that women are less likely to be able to raise a claim of unfair dismissal in these circumstances (this is on the basis, very broadly, that females are more likely to have interrupted periods of employment than males).  This issue was discussed by the House of Lords (now the Supreme Court) back in 2000 in the case of Regina v Secretary of State for Employment [2000] 1 WLR 435.  Here female employees claimed they had been indirectly discriminated against due to the two year qualifying period (although the law had changed to one year in 1999, the women’s claims had been raised before this took effect).

It was held in this case that, given the statistics, women had been indirectly discriminated against.  Regardless, the introduction of the two year period was deemed to be justifiable.  It was, according to the Court (three of the five judges), a “reasonable response to a legitimate aim” (the test in any defence to an indirect discrimination claim).  The aim was to encourage recruitment by employers.

So could the re-introduction of the two year period be challenged on this basis?  It seems unlikely.  First, the Government has been careful to make it clear this is a policy decision with the (presumably) “legitimate aim” of encouraging employers to hire more employees.  Given the economic circumstances, it may well be difficult to challenge this.  Further, the statistics used in the House of Lords case were from 1985 to 1993.  Arguably the situation is different today.

Tribunal Claim Fees

This second change is still shrouded in mystery to an extent, as we have only heard about it via the Chancellor’s speech.  The announcement has yet to be published in writing by the Government.  As far as we know, the fees will be as follows:-

  • Up front fee of £250 payable by Claimant
  • £1000 payable by Claimant when hearing date fixed
  • Money refunded if Claimant wins
  • Money forfeited if Claimant loses (NB the successful employer will not receive this though)
  • Higher fee for claims where damages of more than £30,000 are sought
  • Poor Claimant’s will not have to pay (NB unclear what this means exactly but could be the sting in the tail for employers)

The reasoning behind this is clear.  These fees will discourage people from bringing vexatious claims.  No doubt unions will argue that the fees will also discourage genuine claims.  It is almost impossible to predict whether or not this will be the case.  We will simply have to wait and see and it will be very interesting to see the detail of this once published.