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Osborne announces shake-up of employment law

Meredith Hurst Tuesday, October 4, 2011

George Osborne has announced a shake-up of employment legislation with the intention being of saving British industry money and reducing the numbers of employment tribunal claims.

The first of the major reforms is the proposed increase in the qualifying period to claim unfair dismissl from one year to two years.  This is likely to take effect in April 2012. 

This will give employers more flexibility to carry out risk-free dismissals in the first two years of employment.  Employees on the other hand will have to look at ways of getting around the requirement by relying on discrimination as the basis for their claims.  This is not the first time the qualifying period has been at the two year mark.  It was last reduced from two years to one in 1999 having been at the two year limit from 1985. 

The second groundbreaking proposal announced in George Osborne's speech yesterday is the move to charge fees in the employment tribunal as a condition of bringing a claim.  The proposed structure is as follows:

  • A fee of £250 on lodging an ET1
  • A further fee of £1,000 once the claim is listed for a hearing
  • Higher fees if the claim is worth over £30,000
  • The fees are to be returned to the claimant in the event of success or forfeited in the event that a claim is unsuccessful
  • Fees are to be waived if the claimant has no money.

It is proposed that fees will be payable from April 2013.  It is not clear what the means test for a fee waiver is.  If it is income support then many low paid ex-employees will qualify.  

Interestingly, the fees are in excess of the small claims fee limit and may be prohibitive in low value claims 

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