It has recently been announced that the second phase of a government initiative aimed at reducing the number of unfair dismissal tribunals brought against small businesses, will come into effect next year.
When the initiative was proposed back in 2011, it was positioned as a step towards "ending the one-way bet against small businesses" – protecting the business owner from a vexatious appeal to an employment tribunal, and therefore making it less risky to hire people.
Phase one (introduced in April 2012) stipulated that an individual must have been in the job for at least two years before being eligible to make a claim for unfair dismissal. Previously, the qualifying period had been one year.
Phase two will mean that from summer 2013, employees will have to pay £390 to take a level 1 or simple case to tribunal with level 2, a more complex case costing £1,200 to be heard in a tribunal.
The aim is to encourage cases to be resolved through mediation, rather than going to court, and the expectation is that the combination of these two changes will result in 2000 fewer tribunals each year, meaning a saving for business of £6 million.
Whilst this all sounds like good news for business owners, some critics feel that the relatively low level of fees may not cut the number of cases as significantly as expected. In addition, many unfair dismissal cases tend to be linked with discrimination claims, and these can be made from day one of employment.
The message to business owners, therefore, is that there is no room for complacency. Directors and managers need proper training and HR procedures in place. “Slip-up’s” can spiral out of control and lead to situations of conflict – which not only affect the employer and employee concerned, but can also become a morale issue amongst the rest of the workforce. It is therefore vital to take proper advice as soon as a potential issue arises.
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