Tribunal Reforms Make it Easier to Sack Underperforming Staff

Businesses will be able to sack staff during the first two years of their employment without falling foul of unfair dismissal claims, under new Government proposals.

The reforms aim to simplify the unfair dismissal process so that employers aren’t deterred from taking on staff due to potentially costly employment tribunal claims if they are forced to sack an employee. The main proposals include:

  • Increasing the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years
  • Requiring all claims to be lodged with Acas’ Pre-Claim Conciliation service – to encourage disputes to be resolved without reaching a tribunal hearing
  • Speeding up the tribunal process
  • Introducing fees for employment tribunals, so that users contribute to the costs
  • Introducing penalties for employers found to have breached employee rights – likely to be between £100 and £5,000.

“We often hear that knife-edge decisions about whether to hire new staff can be swung by concerns about ending up in an employment tribunal if things don’t work out,” said Business Secretary, Vince Cable. “Our proposals address these concerns and should help give employers more confidence.”

However, the Institute of Employment Studies’ director, Nigel Meager, said he wasn’t convinced the reforms would have any impact.

“Any competent employer is going to be able to make a decision about a new employee’s performance within a year of hiring them. It’s not clear what extra advantage there will be from having two years.”

The Forum of Private Business (FPB) welcomed the reforms to the tribunal process, but criticised the expectation that the parties will need to contribute to the tribunal’s costs of handling claims.

“Unfortunately, the potential for defending claims and the pressure to settle due to the financial risks involved in losing will be greater under these proposals, no matter what the headlines say,”

said an FPB spokesman.

According to the Department for Business, Innovation and Skills (BIS), tribunal claims increased by 59 per cent last year on 2009. Businesses have to spend an average of £4,000 to defend against a claim.

Access the consultation document on the reforms to the tribunal service, visit the BIS website.

Tribunal Reforms Make it Easier to Sack Underperforming Staff

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