BRITISH CHANCELLOR George Osborne has announced that workers will not be allowed to take unfair dismissal cases for two years after taking up a job. The aim of the measure was to increase business confidence, he said.
Another measure announced by the chancellor at the Conservative Party conference in Manchester was the charging of a fee for lodging a tribunal case. This was to prevent vexatious charges.
In addition, efforts would be made to help cash-starved small- and medium-sized businesses to get billions in state-backed lending, he said.
Under the changes, workers, from next April, will not be covered by legislation until they have been at work for two years. They will also have to pay up to £200 to lodge an application on any issue to employment tribunals and up to £1,000 before cases are heard.
Last year 218,000 cases were heard by employment tribunals – a drop of 8 per cent on the previous year’s figure, which was 44 per cent higher than the year before. This illustrated, say lawyers, the difficulties caused as companies lay off staff in the recession.
Fifty-thousand cases heard by employment tribunals dealt with unfair dismissal claims, with just one in eight being successful at full hearing. However, employers argue that most of the rest are settled by companies, who pay compensation to cut the costs of dealing with such cases.
Justifying the fee, which will be repaid if the claim is successful, Mr Osborne said: “Fears of vexatious claims often act as a disincentive for businesses to employ new people. Introducing fees will help give businesses the confidence they need to create new jobs.”
Under current UK rules, sacked employees can claim for unfair dismissal after a year in a job. However, Mr Osborne insisted that core protections under the legislation – such as the right not be discriminated against – would not be affected.
The move provoked fury from general secretary of the Trades Union Congress Brendan Barber.
“Making it easier to sack people without any reason is simply a charter for bad bosses,” he said.
“This will do nothing to boost growth and will not create a single extra job. It will also deny the majority of young people in work any redress from unfair dismissal, at a time when youth unemployment is rising again.”
Workers seeking the protection of employment tribunals because they had not been paid the minimum wage would be particularly hit by the introduction of tribunal fees, as they would not be able to afford to take a case, he said.
Leading union official Paul Kenny, who is GMB general secretary, was scathing. “The very notion that reducing the rights of workers of between 12 months’ and two years’ service to bring unfair dismissal claims will create a single new job is quite frankly absurd.
“Job creation is not the real reason the Tory party want to take away these rights. The real reason is that the Tory party is increasingly being funded by asset strippers and predators who resent workers having any rights to challenge their exploitative ways.”
The Federation of Small Businesses, although it welcomed the new measures, was not fully pleased. SMEs were struggling, it said, with employment laws that hindered growth “and burden them with yet more red tape”.
In an acknowledgment that past efforts to get the banks to lend to businesses had comprehensively failed, Mr Osborne said the Bank of England would buy billions worth of companies’ bonds on behalf of the treasury.
The chancellor also announced a more conservative approach to climate change, insisting that while the UK would “go no slower” than others in cutting emissions, neither would it go faster.