No fault dismissals – are you in favour?

According to a recent survey from the Institute of Directors, the majority of employers are backing controversial proposals to allow “no-fault dismissals” for under-performing employees.

 The Beecroft report commissioned by Downing Street has made a number of recommendations, that companies be freed from more than 20 employment laws and that they should be able to dismiss workers more easily.

 What are your thoughts? Do you think it will reduce the regulatory burden? Will it encourage business to recruit more people? We’d be interested to hear your views:

Politicians divided on ‘no-fault-dismissal’ proposals

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Email newsletter Free daily HR news email Government proposals to bring in ‘no-fault dismissal’ rules could divide the Coalition partners as the controversial Beecroft report is set to be published.

The plans, outlined in the report last October by entrepreneur Adrian Beecroft, aim to slash red tape for employers and make it easier for them to hire and fire staff as they are needed.

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A breakdown on the Changes to Unfair Dismissal Rights

Changes to Unfair Dismissal Rights

In November 2011 the Government announced its intention to increase the qualifying period required for employees to make unfair dismissal claims at employment tribunals from one to two years’ service. This change will take effect from 6 April 2012 however it is important to note that this will only apply to employees whose start date is on or after 6 April 2012. Businesses will therefore need to be vigilant when considering dismissals for employees who started prior to that date as they will still be able to bring a claim after only one year’s service.

The purpose of the change is to allow businesses more time to resolve employment difficulties and to hopefully reduce the number of unfair dismissal claims placed at tribunal. However it is important to be aware that employees may still raise other claims which are not dependent on the two years’ service requirement.

It is important to note that the change to the qualifying period will not remove the risk of discrimination claims as no qualifying periods apply to these claims. In additional there are a number of exceptions to the qualifying period which will remain.

It is anticipated that the increase in the service requirement for most unfair dismissal claims to two years may result in an increase in employees seeking to make alternative claims as described above. As such it will be important for businesses to seek advice in any circumstances where they are considering the dismissal of an employee to ensure that the risk of any claim being made is minimised. Please contact the Empire Advice Line team if you have any queries about these changes, and especially if you are looking to terminate an employee’s contract of employment.

Can Employees Working Abroad Claim Unfair Dismissal?

Ravat v Halliburton Manufacturing and Services Ltd [2012] UK Supreme Court

In the light of Lawson v Serco [2006], the Supreme Court considered whether an employment tribunal had jurisdiction to hear a complaint of unfair dismissal in relation to a British citizen, living in England, who worked for a British-registered company in Libya on a month-on, month-off basis.

The Court held, dismissing the employer’s appeal against the decision that an employment tribunal did have jurisdiction to hear an unfair dismissal complaint. The Employment Rights Act 1996, ss 94(1) (right not to be unfairly dismissed), 230(1) (definition of “employee”) did not contain any geographical limitation, although some limitation must be implied. Distinguishing Lawson, the question of law was whether s 94(1) applied to this particular employment. It was not for the courts to lay down a series of fixed rules where Parliament had decided not to do so. Their role was to give effect to what Parliament may reasonably be taken to have intended by identifying and applying the relevant principles. The question of fact was whether the connection between the circumstances of the employment and Great Britain and with British employment law was sufficiently strong to enable it to be said that it was be appropriate for the employee to have a claim for unfair dismissal in Great Britain.

The Ravat decision can certainly be viewed as an employee-friendly one – the majority of overseas worker cases will now most likely be caught by s.94 if a long enough list of factors can be produced – but it is open to question whether this is quite what Parliament had intended. Instead, the tribunals are left with a lengthy fact-finding exercise combined with a distinct lack of clarity as to what the relevant facts they should be finding are. From now on, when establishing the scope of s.94(1), anything, it seems, goes.

Has or will your business be affected by these issues? Empire welcome all feedback and comments. Please visit our facebook page where we regularly hold discussions relating to the topics covered in our blog posts.

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Dismissal of Lewd Nurse Unfair

A nurse who was dismissed after she made a lewd comment whilst restraining a patient has won her

case in an Employment Appeal Tribunal.

In Bowater v NW London Hospitals NHS Trust, the nurse was sitting astride a patient who was having a fit and jokingly said “it’s been a few months since I was in this position”. Despite the fact that only her colleagues heard the comment, she was dismissed on the grounds of gross misconduct. The case highlights that it is crucial to take all the circumstances into account prior to a dismissal. In this case, the tribunal took her unblemished record and the fact that no member of the public heard her comments into account.

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Costly Sleepwalking

An employee has won a massive payout after his employer issued a defamatory press release about him. He has been awarded £.8.5 million in compensation. The sleepwalker appeared at the hotel bedroom door of a colleague on three occasions whilst on a business trip in Mozambique. His employer took the decision to issue a press release stating that he had been asked to resign following an 'incident'. The court held that the statement implied that he had made inappropriate advances to the colleague when in fact, he had made no attempt to enter the room.

INCREASE IN QUALIFYING TIME FOR UNFAIR DISMISSAL!

The Government has announced a proposal to increase the length of time that employees need to be employed before they can place a claim for unfair dismissal.

Currently, employees can’t place a claim for unfair dismissal unless they have been employed for more than 1 year. This means that businesses have a period of 1 year in which they can assess a new employee’s suitability for a role and safely dismiss without fear of a costly compensation bill.

A consultation has been launched today, which will close on 20th April 2011. Following this, the government is expected to confirm the increase.

The aim of this measure is to give businesses more flexibility and cut the red tape holding back businesses throughout the UK.

This will be welcome news to business groups, which have campaigned for a reduction in red tape and legislation. Business groups have cited the upsurge in tribunal claims as evidence that the current system is heavily weighted in favour of employees, with the result that businesses are often crippled by costly legal fees and compensation bills.

However, there is doubt about whether the measure goes far enough. Is this enough to encourage businesses to hire more staff, and will it really help employers? Leading employment law and HR firm Empire HR are urging businesses to exercise caution.

Unfortunately for businesses, there is an exception to the qualifying period rule. There’s no qualifying period if the employee can establish that they were dismissed for a reason linked to a ‘protected characteristic’. Defined by the Equality Act 2010, protected characteristics are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

The Equality Act also covers 7 different types of discrimination. For example, the Act introduced ‘associative discrimination’ to many protected characteristics meaning that some people will be covered by the legislation merely because they are related to, or associate with some who has a protected characteristic.

The effect of the legislation is that it might actually be very difficult to single out an employee who is not covered by the Equality Act, so employers need to tread extremely carefully when dismissing any employee – regardless of their length of service. In effect, increasing the qualifying period may not be as helpful to businesses as they thought.

Empire HR are concerned that businesses are being lulled into a false sense of security. Steve Cook, CEO of Empire HR explains “the media is full of headlines stating that businesses can dismiss employees for any reason during the first 2 years of their employment. However, any dismissal carries the risk of a claim and in reality, the Equality Act means almost any employee can place a claim regardless of their length of service. Businesses might get some nasty surprises if they fail to get expert advice”.

There’s also speculation that this change might actually lead to an increase in claims. Employees dismissed within the 2 year period are more likely to cite discrimination as the reason for their dismissal because they will otherwise be unable to place a claim at all. Discrimination claims tend to be the most costly – largely because compensation in these claims is uncapped. They are also notoriously time consuming to defend.

Steve Cook confirms “there’s a real prospect of an upsurge in discrimination claims because employees will effectively be clutching at straws so they can place a claim. The discrimination legislation is now so wide in scope that most employees will be able to claim because they have at least 1 protected characteristic”.

Despite these points, it is positive that the government appears to be focusing on the needs of businesses during these tough times. Businesses will welcome any measure designed to ease their burden, and small businesses in particular are likely to see this change as very encouraging.

The consultation also deliberates the introduction of tribunal fees, and measures to deter vexatious claims. The full consultation document can be found here: http://www.bis.gov.uk/assets/biscore/employment-matters/docs/r/11-511-resolving-workplace-disputes-consultation . Business owners are urged to contribute to the consultation. In the meantime, Empire HR is advising business owners and managers to seek advice prior to the dismissal of any employee. As Steve Cook points out “making a mistake is just too costly in this economic climate”. Empire HR are providing expert guidance on dismissals on their website, and have added a recorded guide to the dismissal procedure. Please visit www.empirehr.com for further information.

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Proposal to Increase Unfair Dismissal Qualifying Period to two years

At the moment the Government is actively considering an increase in the qualifying period for unfair dismissal from one year to two years.

The timetable for decision is yet to be announced and it is very likely that there will be a consultation period (about this and other employment law issues) first.


If the change in the qualifying period occurs, it will be moderately good news for employers but bad news for employees. In theory this would mean that employers would have an extra year to dismiss an employee unreasonably. But the employer could still face allegations of discrimenation or unfair dismissal claims where no qualifying period is required. This would include things such as whistle blowing and certain health & safety, maternity and trade union related dismissals. With these claims tending to be more expensive to defend than 'ordinary' unfair dismissal claims, it is unclear whether employers will find this proposal an entirely favourable change.

Death threat results in tribunal

An employer who allegedly said “I will kill you before you get a penny of redundancy from me” has been forced to pay £13,138 to the employee who subsequently won a constructive dismissal claim. The employee initially accepted an offer to have his job back after requesting redundancy pay, but was given a ‘pointless’ job instead of his old job back.