Should the Labour Party win the next General Election, then they plan to completely scrap the rule which stipulates that you must have 2 years continuous service to be eligible to bring a general unfair dismissal claim in the employment tribunal.
Up until 6th April 2012, the qualifying period had been 1 year's continuous service.
Scrapping The Unfair Dismissal 2 Year Rule
In its employment rights green paper ‘A New Deal for Working People’, the Labour Party state: "Labour will....strengthen the protections afforded to all workers by ending the qualifying periods for basic rights. The current arbitrary system leaves workers waiting up to two years to access some basic rights, including protection against some types of unfair dismissal. Labour will end this arbitrary system and scrap qualifying time."
The Pros & Cons Of Scrapping The 2 Year Rule
Should the Labour Party win the 2024 General Election, then given its intention to scrap the unfair dismissal 2 year rule, the debate over the advantages and disadvantages of scrapping the rule is set to be a focal point in the post-election legislative agenda and intensify among policymakers and stakeholders. So what are the main advantages and disadvantages of scrapping the 2 year unfair dismissal rule?
Advantages
Those who favour srapping the unfair dismissal 2 year rule point to several alleged advantages of doing so, including the following:-
Enhanced Protection For Employees
One advantage of scrapping the two-year unfair dismissal rule is that it would provide greater protection for employees. Currently, individuals who have not completed two years of continuous service with their employer may be vulnerable to unfair treatment or dismissal without recourse. Removing this barrier would ensure that all employees are entitled to legal remedies in cases of unjust termination, promoting fairness and equality in the workplace.
Reduced Employer Discretion
Eliminating the two-year requirement could discourage arbitrary dismissals by employers and incentivize employers to adhere to fairer dismissal practices, fostering a more stable and secure work environment for all staff members.
Greater Employee Engagement And Job Security
By providing employees with the assurance that they have recourse in cases of unfair dismissal, employers have greater potential to foster a culture of trust and loyalty amongst their workforce. This increased job security can lead to higher levels of productivity, commitment, and retention, ultimately benefiting both employees and employers in the long run.
Aligning With International Standards
Many countries around the world do not impose a minimum service requirement for unfair dismissal claims, reflecting a global trend towards strengthening employee rights and protections. By aligning with these international standards, the UK could demonstrate its commitment to upholding employment rights and fostering a more supportive and equitable working environment.
Disadvantages
Nevertheless, critics of the proposal to scrap the unfair dismissal 2 year rule point to several alleged problems, including the following:-
Increased Litigation And Costs
One of the main drawbacks of abolishing the two-year continuous service rule is the potential for a rise in litigation and associated costs for employers. Removing the 2 year rule will likely increase the number of unfair dismissal claims, leading to increased financial burdens for businesses, particularly smaller enterprises.
Impact On Recruitment And Hiring Practices
Some argue that scrapping the two-year rule could have unintended consequences on recruitment and hiring practices. Employers may become more cautious in offering permanent positions to new hires, opting for temporary or short-term contracts to mitigate the potential risks associated with easier access to unfair dismissal claims. With a permanent hire, there would no longer be an opportunity to trial an individual by placing them on to a probationary period. Instead, it would likely become more common to offer a temporary contract, only offering a permanent contract should the employee work out.
Impact On Small Businesses
Small businesses, in particular, may bear a disproportionate burden from the removal of the two-year continuous service requirement. These enterprises often operate with limited resources and capacity to handle complex legal issues and disputes. Without the protection offered by the current rule, small businesses could face heightened vulnerability to costly legal claims and settlements, posing a significant risk to their sustainability and viability in the long term.
Erosion Of Employer Flexibility
Another disadvantage of scrapping the two-year unfair dismissal rule is the erosion of employer flexibility in managing their workforce. Without the buffer provided by the two-year threshold, employers may find themselves constrained in making necessary staffing decisions, such as restructuring or downsizing, for fear of potential legal repercussions. This loss of flexibility could impede businesses' ability to adapt to changing market conditions and organizational needs, ultimately hindering their competitiveness and growth.
The Future
Given that it is highly likely that there will be a Labour Government later this year, the debate over this issue is likely to intensify given Labour's intention to scrap the 2 year unfair dismissal rule.
