The length of service needed to qualify for unfair dismissal rights has been changed from time to time. It started at six months when unfair dismissal was “invented” in 1971. It was increased in 1980 to one year (two years for small firms of 20 or less employees) and then to two years (for employees of any employer regardless of size) in 1985. Then in 1999 it was reduced to the current one year (although rather confusingly the two year period was left, and still continues, for the right to claim statutory redundancy pay).
Newspapers have recently jumped on a remark made by Lord Young of Graffham on the BBC Today programme in which he said, under some pressure, that he would consider recommending to the Coalition government that the two year qualification period which operated from 1985 to 1999 should be reinstated. He noted in the BBC interview that “employment started shooting up again” after the qualifying period was increased to two years in 1985 (if you have speakers on your computer you can click to hear a rerun of the BBC interview with Lord Young).
It is worth noting this here as it would be easy to take Lord Young’s widely reported remarks out of context.
Lord Young was being interviewed following his appointment by the Prime Minister to prepare a new report “on how to make Government more small business and start-up friendly”. That appointment was confirmed in a document called “Backing Small Business” issued by the Department for Business on 1st November and it was that appointment which led to the BBC interview. The document itself contains the usual platitudes about how the “Government is committed to a comprehensive effort to prioritise small businesses and those that run or aspire to run them”, and of course is none the worse for that, but it is not concerned with employment law (there is a separate ongoing review of employment law), does not spell out any detailed proposals and certainly does not include any suggestion that there may be a change to the unfair dismissal qualifying period.
None of this means that reinstatement of the previous two year qualifying period of continuous employment for entitlement to unfair dismissal rights is out of the question but it does mean that Lord Young’s comments should not be taken out of context. Lord Young was keen to stress that he wanted the views of others on the matter and it is not a current proposal.
Of course, Lord Young rather burnt his boats as a result of his “never had it so good” and “so called recession” comments in a Daily Telegraph interview on 18 November.
For those interested the arguments in favour of and against increasing the qualifying period are along the following general lines:
In 1999, when it reduced the qualifying period from two years to one, the government’s view was that a year is a reasonable length of time for an employer to decide if a recruit is suitable for the job and that it is unreasonable for employees to be left in a state of uncertainty about the security of their employment for longer than that. It was also thought that a two year qualification period inhibited mobility – if it takes you two years to qualify or requalify for unfair dismissal rights you will think long and hard before changing jobs.
The counter argument is that requiring only a short period of qualification for obtaining unfair dismissal rights encourages employers not to take on additional staff at all. This argument was effectively the basis on which the House of Lords ruled in February 2000, in the then much publicised Seymour Smith case, that the previous two year qualification period had been “objectively justified” during the recession in 1991 even though it was sex discriminatory in that fewer women than men could qualify.