Stay vigilant and avoid costly tribunal fights, employers told

Under the reforms, which came into effect on April 6, workers have to reach two years’ service rather than one to claim unfair dismissal against their employer.

However, there are still several situations in which there is no qualifying period, for example where dismissals are claimed to be a result of discrimination or whistleblowing.

In addition, employees who started their employment before April 6, 2012, only require one year service to qualify.

The Government believes the changes will boost growth, encourage recruitment and reduce the number of unfair dismissal claims. Unions say the changes will result in a “hire and fire” culture.

Paul Grindley, a partner at hlw Keeble Hawson Solicitors in Leeds, said: “It’s essential for employers to remain vigilant in order to minimise the risk of a costly employment tribunal.

“The extension of the period of employment after which an unfair dismissal claim can be brought means that employees will focus on bringing any grievance to tribunal under one of the unrestricted categories – whistleblowing or discrimination being obvious examples.

“The best approach is for employers to ensure they have proper disciplinary procedures in place, and to maintain good communication with employees so that any grievances can be nipped in the bud at an early stage.”

Jane Hannon, legal director in DLA Piper’s Employment team in Leeds, said: “The changes are likely to be good news for businesses in the region, effectively giving them an additional year to assess whether an employee is suitable for the role.

“This may also give employers the confidence to hire additional employees on a short to medium term basis without the risk of unfair dismissal claims, provided their employment is terminated before its second anniversary.”

But she agreed that the move would lead to a rise in discrimination claims.“While there may be a slight reduction in the number of unfair dismissal claims being brought due to the increase in the qualifying period, it is also likely that there will be an increase in discrimination claims by employees who are dismissed before reaching two years’ service,” she said.

“Discrimination claims can be more difficult for employers to defend and more costly, not only because of the management time involved but also because of reputational issues and the potential compensation which can be awarded by an Employment Tribunal.

“So although at first blush these changes may be to employers’ benefit, they are unlikely to have a significant impact on the way businesses recruit and manage employees.”

Ryan Richard, managing associate at Addleshaw Goddard said: “It would not be difficult for employees to find creative ways to circumvent the two-year qualifying period.”

He added: “Although the rationale behind the reforms is well intended, it may not produce the desired result. Only time will tell whether the reforms are a success or poisoned chalice.”

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