At the weekend, following a leaked report, the press announced the Government was proposing to increase the qualifying period for unfair dismissal from one year to two years. This was confirmed on Monday morning by Lord Young on Radio 4's Today programme. There is currently no timetable for a decision and there may well be a period of consultation on this proposal before any firm plans are made. However, if this change were to go ahead, it would double the qualifying period that employees must work before they could claim unfair dismissal.
The report suggests that this proposal forms part of a wider Government initiative to increase UK competitiveness and to reform the economy in line with more flexible labour markets in the Americas and Asia. Currently, most employees must have one year's continuous service at the date their employment ends, or have been dismissed without notice within a week of obtaining a year's continuity of service, to claim unfair dismissal.
If the proposed change goes ahead, it will reverse the reduction in the qualifying period from two years to one year that was enacted by the previous Labour government. No Act of Parliament is required to bring in any change in qualifying periods, simply an Order by Edward Davey, the Minister for Employment Relations.
Employers would then have two years in which to dismiss "unfairly". However, as is currently the case, employers could still face allegations of discrimination, whistleblowing, health and safety, maternity or trade union related cases for which no qualifying period of service is required.
In R v. Secretary of State for Employment, ex parte Seymour-Smith , the House of Lords held that the (then) two-year qualifying period for unfair dismissal was potentially discriminatory against women, as women were statistically less likely than men to accrue two years' employment. However, the House of Lords also found that the Secretary of State could justify the social policy behind the qualifying period, namely opening up opportunities in the labour market, which meant that it was able to remain. It seems likely that a similar outcome would occur today if the increase to two years was challenged.