David Gray-Jones: Changes to unfair dismissal law could have a significant impact on charities

But the planned increase in the qualifying period from one year to two may be challenged on the grounds that it is indirectly discriminatory, says our online legal commentator

David Gray-Jones
David Gray-Jones

The coalition government has indicated that it intends to carry out a comprehensive review of the law on dismissal to determine whether existing procedures are too complex and place a disproportionate burden on businesses. 

This could have a significant impact on organisations, including charities, that are already having to adapt to significant changes to unfair dismissal law due to take effect on 6 April.

Third Sector columnist Craig Dearden-Phillips has advocated further changes that would limit access to the tribunals, including a requirment for applicants to lodge a deposit that would not be returned if they lost the case. This has sparked a lively debate among readers.

In the changes from 6 April the unfair dismissal qualification period will rise from one year to two. This means an employee will need to have served two years of continuous employment rather than one before he or she can bring a claim for unfair dismissal. The qualifying period was reduced from two years to one year in 1999.

The aim of the change is presumably to reduce the number of claims being presented to employment tribunals. However, it is arguable whether the extension of the qualifying period will achieve this aim. First, there is a very real possibility that the extension of the qualifying period will be challenged on the basis that it is indirectly discriminatory and, as such, unlawful.

During the 1990s the two-year qualifying period was challenged as being indirectly discriminatory on the ground of sex, on the basis that the proportion of female employees in the workforce with service of less than two years was greater than the proportion of male employees, thus placing female employees at a disadvantage when compared with men. The challenge was eventually defeated by the government on the basis that any disadvantage suffered by the female workforce was justified. It is therefore possible that any new challenge would fail.

Furthermore, current assessments indicate that the gap between the number of females and males with less than two years' continuous service with their employer has reduced since the 1990s, and this will make a challenge based on indirect sex discrimination even more difficult.

However, discrimination law has expanded since 1999 and now prohibits discrimination because of age. It is likely that younger employees will be able to show that they have a proportionately shorter length of service than older employees. The same may be true of non-white and disabled employees when compared with white or non-disabled employees.

Even if the government is able to defeat any challenges in the courts, there will be a considerable period of uncertainly while this is resolved.

Any employee with less than two years’ service who wishes to make an unfair dismissal claim will probably be advised to submit it to an employment tribunal, at which point it will be put on hold until any challenges to the lawfulness of the extension of the qualifying period have been resolved by the higher courts.

Another reason why the extension of the qualifying period might not cut the number of claims to the extent the government hopes for is that employees with less than two years of service will still be able to submit claims if they allege that the reason for their dismissal is a protected characteristic under the Equality Act 2010, such as sex, race, disability, sexual orientation, religion or belief, or age.

A claim under the Equality Act does not require a minimum period of continuous service by the employee before it can be submitted. The same will also apply to claims in which the alleged reason for dismissal is one deemed automatically to beunfair – for example, a dismissal because of pregnancy or maternity leave or because the employee is a whistleblower. A determined and litigious employee who believes that they have been unjustly dismissed by their employer will undoubtedly look for ways to circumvent the extension to the qualifying period.

David Gray-Jones is a partner at Thomas Mansfield Solicitors

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