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Changes to unfair dismissal rules 'could save businesses £6m'

Posted: 2nd November 2011   In: Dispute Resolution

The Government has confirmed that it is making changes to the unfair dismissal rules in an attempt to encourage employers to take on more staff.

The qualification period for being able to bring a claim of unfair dismissal is to be extended from one year to two years. The change will come into effect from next April.

It’s estimated that the move will save businesses £6m a year. 

The Government is also considering introducing fees for bringing tribunal claims and is staging a public consultation on the issue. The details haven’t been finalised but it’s thought the fee for lodging a claim could be £250. This would only be refundable if the claim was successful.

There has been no announcement about when fees might be introduced.

Ministers say the main purpose of the change is to give employers the confidence to take on more workers. Business Secretary Vince Cable said: “Businesses tell us that unfair dismissal rules are a major barrier to taking on more people. 

“The priority of this government is to increase growth in our economy. We have one of the most flexible labour markets in the world but there is more we can do to give British business the confidence it needs to create more jobs and support the wider economy to grow.”

We shall keep clients informed of developments. Please contact us if you would like more information about the issues raised in this article.