Law changes aimed at boosting employment

LEGAL changes which will affect employers and employees in the Borders and all over the UK came into force on Good Friday.

In essence, the UK Government has changed the qualifying period for protection from unfair dismissal from one year to two years, the intention being to help boost business confidence and boost growth and recruitment.

To give it the full legal title, The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 was made on March 30, and came into force on April 6.

Currently, employees only need one year’s service to bring an unfair dismissal claim.

From now on, they will need two years service. This doubling of the qualifying period brings it into line with the service requirement for a redundancy pay claim.

However, the change will not have any immediate impact, as it applies only to those recruited on or after April 6, 2012. Those recruited before that date are not affected, and so, the first potential point of change is April 5, 2013 when such employees would have qualified to bring their claims under the old regime.

So how are the changes being viewed?

Many employers have given the changes strong support, maintaining that it will help reduce employment bureaucracy and help cut down the number of costly employment tribunal hearings. The Government’s Department of Business Innovation and Skills, which led the review of the law, originally estimated that unfair dismissal claims will fall by around 2000 – saving employers £15million – £20million per annum.

Others are less convinced, believing employees will look at other routes to bring tribunal cases, including discrimination and whistle-blowing which have no qualifying period. In addition claims brought via these routes has no cap on compensation, unlike unfair dismissal claims which carry a £72,300 maximum.

However, it is apparent that frivolous claims brought without real legal merit will not go far, and will be dealt with sternly by tribunals who feel the system is being manipulated.

It is also hoped that the changes will encourage employer confidence to take on staff, with fewer worries about facing expensive unfair dismissal tribunal claims if things do not work out as anticipated or hoped.

Whether the changes to the law do create a more confident base of employers willing to invest in greater recruitment, a laudable aim in the current economic climate, remains to be seen.

The full impact of the changes will not be felt for some time, given that the new qualifying period will only apply to those entering employment after April 6. We can only wait and see.

z Ben Docherty is a senior

associate and Andrew Linehan is a partner (rural services), based at the Jedburgh office of Scottish law firm Lindsays.