After claiming a “drafting error” last week in a statement about how the government is removing red tape for businesses, it has now come clean and admitted that the qualifying period for employees claiming unfair dismissal will increase to two years from April 2012.

The government claims the move will save businesses nearly £6 million a year (a drop in the employment ocean) and will see the number of unfair dismissal claims reduce by around 2000 a year, about one per cent of cases overall.

It also opened a three-week consultation period earlier this week, encouraging businesses to review employment-related law.

The Regulations are broken down into four sub-categories:

  • compliance and enforcement (including the national minimum wage, the 48-hour working week and employing agency workers)
  • letting people go (ranging from notice of termination to redundancy)
  • managing staff (including working time, statutory annual leave, sick pay and disability adjustments)
  • taking people on (rights and responsibilities around job adverts, interviews and probation periods).

This follows on from last week when the government published its second statement (the first was in April) about the number of new Regulations on businesses it has reduced from January to December 2011, which it claims has been largely successful. Only 19 Regulations have come into effect, whereas 33 were removed.

Based on the premise of “one-in, one-out”, government departments are not allowed to introduce a new Regulation until they first get rid of an old one.

An ‘In’ is a measure that “results in an increase in regulatory costs for business. In other words, the direct costs to business, assessed over the lifetime of the Regulation, are expected to exceed the value of any benefits or savings to business”.

An ‘Out’ is a measure that “removes or recasts an existing regulatory burden on business, resulting in a quantified reduction in costs to business”.

As well as the “drafting error” on unfair dismissal, the statement also confirmed that the government will be introducing fees for lodging employment tribunal claims.

Head of Employment Rights at Thompsons Solicitors Victoria Phillips said: “These announcements are a complete sop to the business lobby and gives employers the green light to employ staff for one year and eleven months before getting rid of them. And all to save less than £6 million.

“It isn’t about cutting red tape, it’s about making it easier to sack people. Coupled with the introduction of employment tribunal fees, a chilling proposal which means a large number of people won’t be able to enforce their rights, this is another vindictive attack on vulnerable people which has nothing to do with flexibility but about pandering to the vested interests of employer bodies.”

For more information about the review of employment-related law, go to:
the Red Tape Challenge section of the Cabinet Office website.

To read the statement, go to:
the Department for Business Innovation & Skills website

To read individual departmental statements, go to:
the Department for Business Innovation & Skills website, individual statement section