Seeing as how most of these changes are pretty administrative you may have skipped past to other news. I hear there’s a Royal Baby or something? But despite most of these changes only really concerning those within the legal profession there are a number of important measures that are good news for business. To save you scanning through the entire Ministry of Justice briefing – and besides, we barristers love reading a long document! – I thought it might be helpful to highlight them.
Perhaps the most likely to affect the way you conduct your business is the increase in the qualifying period to claim unfair dismissal to two years. This means businesses now have more flexibility with their staffing and is designed to encourage SMEs to hire new employees, safe in the knowledge that if it doesn’t work out they’re covered.
Now of course there are exclusion provisions whereby this two-year minimum of service wouldn’t apply, for example whistleblowing, discrimination and harassment, but where an employee is simply dismissed on the grounds of capability within the first two years this can no longer be submitted to the tribunal on the grounds of being unfair.
The result will be a dramatic reduction in the number of early-intake and capability related tribunal cases which we expect to relieve a great deal of costs on business, but the flipside is that while a whole raft of claims will be inadmissible, the compensation being bargained for among employees past the two-year minimum will potentially be higher as their salaries are likely to have been raised.
My advice is to bear in mind this ability to eek out further compensation as well as to consider reviewing your contracts and putting in place an 18-month review or extension to your company’s probation period.
The other crucial change is the introduction of fees. From the 29th July employees claiming unfair dismissal and pursuing compensation through tribunal will need to pay a £250 or £160 ‘issue fee’ (depending on the complexity of the case), followed by an additional £950 or £230 ‘hearing fee’ should their case reach tribunal.
Now while designed to put off fraudulent claims the court’s power to ask businesses to repay an employee’s fees could in fact mean that businesses also incur an additional cost on top of the expense of tribunal. In practise I expect this discretionary power to serve as a penalty for the losers. Be warned.
Finally although a less obvious a change, I expect the introduction of ‘protected conversations’ to have a positive impact on negotiations. Whereas in the past any conversation between the employer and employee pre-termination could be used against them in tribunal, now under the ‘protected conversation’ ruling both parties are able to speak openly to one another about what’s not working without fear – provided of course that both parties are aware that this is a protected conversation and have agreed upon its basis. My advice is to keep a signed note of this conversation to avoid any grey area.
Tribunals can often become a messy affair, with every prior conversation dredged-up, so for SMEs it’s the chance to breathe a sigh of relief now that their communication with employees can be more free and honest. I also suspect that this will assist with the chance of a happy resolution, as one of the more common roots behind a dispute is simple miscommunication.
Nevertheless, threatening or improper language must be avoided and the tribunal retains a discretionary power to reference ‘protected conversations’ in the event that an employer’s bullishness crosses the line.
Together these changes should reduce the annual number of tribunals and create a better environment for businesses to take on staff, but as ever it’s no cause for complacency. Due diligence and following the correct dismissal procedure is always the best way to avoid a dispute or knock a fraudulent claim out of the water. If in doubt it’s best to contact an expert for advice to ensure your house is in order.