We recently heard from Chancellor George Osborne that the qualifying period for unfair dismissal is set to increase from one year to two years from April 2012.
The Chancellor announced that such a reform was necessary to encourage SMEs to recruit, without the fear of finding themselves in the employment tribunal if they subsequently needed to dismiss staff.
Shortly after the Chancellor’s announcement, a report on employment law reforms, prepared by venture capitalist Adrian Beecroft and commissioned by the Prime Minister, was leaked to the Daily Mail. In the report, Mr Beecroft spoke of the advantages of dispensing with unfair dismissal rights altogether, where the employee is dismissed by reason of poor performance. In Mr Beecroft’s view, this change would provide a much needed boost to the British economy, as it would allow employers to take a more confident approach to recruitment, knowing that they could quickly remove those members of staff who were underperforming.
Without affirming Mr Beecroft’s proposal, business secretary Vince Cable has now spoken out in support of consultation on reform, explaining that a balance must be struck within employment law. He considers that the changes will continue to protect the rights of employees but, at the same time, the simplified dismissal procedure will give employers much needed confidence to recruit, and will reduce the amount of time and money spent in the tribunal.
Other issues to be discussed in the consultation include:
- Excluding unfair dismissal laws altogether for small businesses with fewer than 10 employees, provided compensation is paid;
- Making provision for “protected conversations” which will allow employers to address issues of poor performance with employees without the conversation being used as evidence in the employment tribunal;
- A reduction in the redundancy consultation period where more than 100 redundancies are proposed.
Mr Cable emphasised that these reforms are a positive step towards economic growth and are not intended to create a feeling of insecurity amongst existing staff. The Liberal Democrats and trade unions are less convinced and would argue that such changes will affect employee confidence in the workplace, leading to a “hire and fire” culture.
We await developments with interest.
For more information on any aspects of employment law, please contact either
Ian Besant or
Suki Harrar.
