Since April 2012, employees have normally required at least 2 years’ service before they earn the right to bring an unfair dismissal claim. Labour’s most recent manifesto committed to the removal of this ‘qualifying service’ requirement, allowing employees to claim unfair dismissal from day one of employment. This was a key plank of Labour’s offering to workers and trade unions at the last General Election but shortly before Christmas, their plans radically changed. So what’s going on?
Not as easy as they thought
For better or for worse, the Government found it rather more difficult to get their legislation through Parliament than they had expected. The House of Lords stubbornly refused to vote in favour of the total removal of the ‘qualifying service’ requirement, instead arguing for a shorter qualifying period of 6 months’ service to be retained. After much to-ing and fro-ing, the Government was forced to accept the House of Lords’ demands.
Good news and bad news
Many employers will be pleased to hear this news, reassured by the greater certainty the 6-month qualifying period will provide. What they may be less happy about is the prospect that this change in approach comes with a sting in the tail. As a trade-off for retaining a 6-month ‘qualifying service’ requirement, the Government is removing entirely the current cap on unfair dismissal compensation. Presently, successful unfair dismissal claims can only normally result in a maximum compensatory award of £118,223 or a year’s gross basic pay (whichever is lower). When this cap is removed, the Government opens the door to the prospect of much higher value unfair dismissal claims being pursued through the Employment Tribunal.
So what now?
As things stand, these changes are likely to be introduced in January 2027. In advance of that date, employers need to take a close look at their practice and procedures in relation to recruitment and the policing of probationary periods. After all, the window of opportunity for more safely correcting recruitment errors is going to be much reduced.
If you want to discuss the impact of these changes on your business, please get in touch.
James qualified as a solicitor in 2001, having completed his academic studies at the University of Sheffield. Throughout his career, he has worked for a number of prestigious regional law firms, joining stevensdrake as Head of Employment Law in 2012.
As well as pursuing and defending the full range of Employment Tribunal claims, James spends a considerable amount of his time providing advice and support to businesses of various sizes. He advises on a wide variety of HR and employment law issues, including employment contracts, HR processes and procedures, grievances, disciplinary issues, absenteeism, performance management and settlement agreements. He also regularly helps clients with redundancy exercises and internal reorganisations.
James has previously been described as an ‘Associate to Watch’ by Chambers UK, an independent guide to the legal profession. His clients regard him as “thorough”, “easy to work with” and someone who avoids blinding them with legal jargon.
Outside of work, James balances family life with ambitions of swimming, running and cycling a bit faster.
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