Following the recent leaking of the controversial Beecroft Report, the Government’s proposals to reduce the scope of unfair dismissal have attracted much press attention and increased scrutiny from lawyers.
The leaked report, authored by venture capitalist Adrian Beecroft, had caused concern that the Government was intent on abolishing the right to make unfair dismissal claims by introducing ‘compensated no fault dismissals’. In practice, this would mean that employers would no longer be required to have a fair reason for dismissing their employees and would only be required to comply with the contractual notice periods in employees’ contracts of employment. It was felt by sections of the press and lawyers that such measures would introduce an arbitrary approach to dismissing people and that this would cause much harm to society as a whole.
Since the leaking of the report, however, Prime Minister David Cameron has re-affirmed the Government’s commitment to introducing its stated proposals regarding unfair dismissal (rather than the Beecroft recommendations) and for them to come into force from 6 April 2012.
Designed to ease the burden on employers in an uncertain economic climate, the proposals will increase the required period of eligibility to bring a claim for unfair dismissal from 1 to 2 years. During this period, employers will not be required to have a fair reason for dismissal or have a lengthy procedure in place for where there are conduct or performance related issues.
Weighing up the possible impact of these proposals, lawyers have pointed to potential unintended consequences. It has been argued, for example, that employees will spend more time considering other types of claim they can bring which do not require a service element, such as discrimination and whistleblowing claims. With the volume of such claims potentially increasing due to the new requirements for unfair dismissal claims, managers could find they were spending a greater amount of time defending claims overall as claims relating to discrimination and whistleblowing tend to be of a more complex nature.
Despite these concerns, lawyers also saw the changes in unfair dismissal requirements having their desired effect, providing the Government introduced its additional proposals in tandem. The Government wants to encourage earlier resolution of disputes, speed up the tribunal process, help to filter out weak claims from the tribunal process and charge claimants a fee for filing employment claims. In particular, it was thought that having to pay a fee could make a claimant think twice about whether they had a strong discrimination or whistleblowing claim and result in a reduction in the number of tribunal claims being faced by employers.