Out-Law News 2 min. read

Employment tribunal fees introduced and unfair dismissal qualifying period extended


Employees will have to pay a fee to take a case to an employment tribunal which they will only get back if they win, while the time a worker has to be an employee before claiming unfair dismissal will be doubled to two years, the Government has announced.

Speaking at the Conservative Party conference in Manchester this afternoon, Chancellor George Osborne said that the changes would make it "much less risky" for businesses to hire people.

The change to unfair dismissal claims, which Government figures claim could save businesses nearly £6 million a year, will come into force on 6 April 2012. It has not yet been announced when tribunal fees will be introduced.

Both changes were published last week in an early version of the Department for Business, Innovation and Skills' Statement of New Regulation, summarising the regulatory changes each government department intends to introduce before the end of the year.

Having to pay a fee before an employment tribunal case could be taken to court would tackle "vexatious claims", the report said.

This was later revised to state that the fee would "transfer the cost burden from tax payers to the users of the system", as well as suggesting that the increase in the unfair dismissal qualifying period was still at the proposal state.

Employees are currently able to bring an unfair dismissal claim against their employers once they have been in their jobs for one year. An unfairly dismissed employee can receive a cash award or in certain circumstances be reinstated or re-engaged.

Last year there were 236,000 unfair dismissal cases with an average award to successful claimants of about £9,000, according to the BBC.

In an interview with the Telegraph newspaper on Friday http://www.telegraph.co.uk/news/politics/georgeosborne/8800413/No-tax-cuts-before-the-next-election-says-Osborne.html Osborne admitted that the employment law changes were "not going to be popular".

"There are some vested interests who will attack us for it, but it's crucial to give business the confidence that they can take people on, give people the chance, put them into work, without immediately facing the prospect of tribunal hearings and all sorts of costs that will otherwise put them off hiring people," he said.

Dr John Philpott of the Chartered Institute of Personnel and Development (CIPD) said that it was unlikely that the changes would reduce the overall number of unfair dismissal claims.

"Employees are increasingly bringing claims linking unfair dismissal with discrimination claims because employees are increasingly bringing claims linking unfair dismissal with discrimination claims which can be made from day one of employment," he said.

"Increasing the qualifying period for obtaining unfair dismissal rights runs the risk of reinforcing a hire and fire culture in UK workplaces which would be detrimental to fostering a culture of genuine engagement and trust between employers and their staff and potentially harmful to the long-run performance of the UK economy. Although the policy change will undoubtedly be welcomed by the de-regulation lobby, it isn't the way to boost growth and jobs."

The Government is currently seeking public comment on over 160 employment law related regulations as past of its Red Tape Challenge, it said.

Comments can be submitted through the Red Tape Challenge website http://www.redtapechallenge.cabinetoffice.gov.uk/themehome/employment-related-law/ until 16 October 2011.

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