Prior to 6 April 2012, employees needed one-year’s qualifying service to bring a claim for unfair dismissal. However, after 6 April 2012, employees now need TWO years’ service before they are able to bring an unfair dismissal claim.
The increased qualifying period means there is significantly less risk to employers having to defend an unfair dismissal claim against those they seek to dismiss within the first two years of service.
However, as a matter of good practive, employers should still regard the basic dismissal procedures set out in the ACAS Code of Practice.
As a gloss on this, employers who have contractual, disciplinary or dismissal policies, but who fail to follow these, could still find themselves defending a breach of contract claims and should, therefore, take care to adhere to the process or calculate the commercial risk in breaching it.
As a reminder, discrimination claims do not require a qualifying period, and neither do whistleblowing claims. For example, an employee who is dismissed whilst pregnant, irrespective of her length of service, and employees who have raised discrimination complaints, would need to be handled carefully.
Compensation changes come into effect
Another more recent change applies to the compensation that can be awarded to the employee by the Employment Tribunal if their claim is successful.
The potential compensation awarded in successful unfair dismissal claims is split into two areas.
First, there is the ‘basic award’, which is calculated in the same way as redundancy, based on a capped week’s pay, the employee’s age and length of service.
Second, and often the more costly part, is the ‘compensatory award’, which is based on the employee’s loss of income as a result of losing their job. The previous statutory cap on the compensatory award in an unfair dismissal claim was £74,200. Now, the compensatory award for claims filed after 29 July 2013 is 52-weeks’ pay or £74,200, whatever is the lower.
Not forgetting there are other potential financial claims that an employee may also claim, such as a nominal amount for ‘loss of statutory rights’ and up to a 25% increase to any award because of the employer’s failure to follow ACAS procedures.
The 52-week limit is no doubt good news for employers. However, it only applies to unfair dismissal claims, and it remains to be seen whether more claims will be crafted to include elements of discrimination or whistleblowing to avoid the limit.