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Employment law update: October 2011

3 October 2011: The Government has this week announced an employment law update containing two new measures which (potentially) herald good news for employers.

Unfair dismissal – qualifying service for bringing a claim

It has been announced that the current requirement for employees to have one year’s continuous employment in order to bring an unfair dismissal claim will be replaced by a requirement to have two year’s continuous employment with effect from April 2012. On the face of it, this appears to be good news for employers as it should give greater flexibility when dismissing an employee in the first two years of employment.

However, matters may not be a clear-cut as they seem. This move takes us back to the days prior to 1999 when the qualifying service required for an unfair dismissal claim was two years. However, at that time, the provision was being challenged as being discriminatory on the grounds of sex (on the basis that women were less likely than men to have the requisite service due to childcare responsibilities). It seems likely that, if this change is made, there will be further challenges to the legislation on the basis that it discriminates not only on the grounds of sex but also age (as younger people are less likely to have long employment).

Even if the change stands up to legal scrutiny it may still not have the effect of reducing the number of tribunal claims. Given the wide variety of protections afforded to employees under the banner of discrimination (sex, age, race, disability and religion and belief to name a few) it seems likely that a disgruntled employee who is unable to bring a claim for unfair dismissal may, instead, decide to bring a discrimination claim. As those who have experienced such claims will know, discrimination claims are far more complicated, costly and time consuming to deal with than a straightforward unfair dismissal claim.

It seems that should this change go ahead next year, it will still be advisable for employers to exercise caution when dismissing an employee.

Fees for bringing claims

The government has also announced its intention to put in place a system of fees for bringing a claim at the employment tribunal. Very little is known about the precise terms of the fees regime at the moment although it has been suggested that there will be a two-stage process where fees are initially paid at the point where a claim is issued and then further fees are paid at the point where a hearing is listed.

It is unclear, at this stage, what the government is intending to achieve in these measures, for example, is it to make the tribunal system self-funding or is it to discourage spurious claims? It is likely that the underlying intention of the government will shape how the fees regime will eventually function.

It appears that if the claimant is successful then they will be refunded their fees, however, it also seems that, if the claimant loses, then the fees will be retained by the tribunal rather than paid to the respondent to help mitigate their costs.

This measure is not due to be implemented until April 2013 and, therefore, there is plenty of time for the provisions to be fleshed out, however, it will be interesting to see how the government intends to balance the competing needs to weed out unmeritorious claims versus ensuring that those individuals who are genuinely disadvantaged by an unscrupulous employer have an ability to access the assistance of the tribunals in obtaining their entitlements (especially where an individual is low paid and/or recently unemployed).

9 March 2011: Government plans to cut employment law red tape

Vince Cable, Business Secretary, has announced the Government’s intention to reduce the amount of employment law red tape faced by UK businesses. In a speech delivered on Friday, he outlined plans to initiate a public review of almost 22,000 pieces of legislation with a view to identifying and removing those that are unnecessary or overly burdensome.

There will also be an exemption from new domestic regulations for employers with less than 10 employees and newly established businesses.

One of the sets of regulations to be affected by this announcement is the planned extension to the right to request flexible working. This was to be opened up to parents of children under the age of 18 this April and was expected to benefit up to 288,000 employees. However, the right is now to remain as it is and will only be available to parents of children under 17 and disabled children under 18. The Government have also confirmed that the right to request time off for training will continue to apply only to those businesses employing over 250 staff and will not be extended to smaller employers as originally intended.

It is hoped that the planned measures will remove barriers to growth and particularly assist smaller businesses. We will bring you updates of any further announcements as the Government continues to review employment legislation.

For more information, contact our Employment & HR team.

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