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Unfair dismissal: what employers need to know

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From April 6, 2012, only employees who have worked for you for two years will have the right to claim unfair dismissal. The idea behind this is to give businesses confidence to take on more workers – the government hopes the change will decrease the number of unfair dismissal claims by more than 2,000 a year.

It’s important to note that the changes will not remove the risk of discrimination claims. No qualifying periods apply to discrimination claims and – importantly! – compensatory awards can reach up to £68,400.

The two-year qualifying period does not mean that employers can just act unreasonably, though. There are quite a few exceptions to the qualifying period that remain. 

What are some of the more important exceptions that employers should watch out for? 

  • Dismissals for making a protected disclosure (whistleblowing)
  • Health and safety dismissals
  • Dismissals connected with pregnancy or maternity leave
  • Dismissals related to membership (or non-membership) of a trade union
  • Dismissals connected with rights under the Working Time Regulations (ie refusing to sign a waiver)
  • Dismissals related to part-time or fixed-term status
  • Dismissals connected to taking part in lawful industrial action
  • Dismissals for a shop worker refusing to work on a Sunday
  • Dismissals for asserting certain statutory rights
  • Redundancies on any of the above grounds

Also note that there is a strictly-enforced time limit on employees lodging a claim for unfair dismissal at the Employment Tribunal: three months, less one day, from the effective date of termination of the contract of employment.

The qualifying period for unfair dismissal claims started out at six months in 1971, increasing to two years for SMEs in 1980 and for all firms in 1985. This was then reduced to 12 months in 1999.

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