Employers face muddy swamp despite new employment legislation

Posted 23/04/2012

Date: 23 April 2012
Author: Annalie King

As business watches for the hoped-for rise in economic activity, employers are being warned to check the small print on recently introduced employment legislation.

The qualifying period of continuous employment before an unfair dismissal claim can be made by an employee has been increased to two years with effect from this month.

But the new rules will only apply to those who start in a new job on or after 6th April 2012, and many employers are missing the fine detail.

“The change has been put forward by the Government as a route to boost employment, hoping that it will give more flexibility on staffing in the longer timescale,” said Ashtons Legal employment law solicitor, Annalie King. “But the important thing is that it does not apply to staff who were employed before the 6th of April, as they will remain eligible to claim unfair dismissal after one year of service.”

To keep in line with the new rules, employers are being urged to keep a careful record of exactly when each employee began work and the length of their continuous service, as this will be needed if disciplinary action ever needs to be taken against the employee.

She added: “As the start of the employment year, April is a good time to check that all the internal practices are keeping up with new legislation.”

Whilst the new rules are intended to support business and help stimulate economic growth, many employers continue to cut staffing costs, and two other recent employment tribunal rulings look set to provide further procedural challenges to employers in future.

Most recently, two cases have hit the headlines where an ex-employee brought an unfair dismissal case against their former employer after being the only employee in the “redundancy pool”, as the group of individuals chosen for redundancy is known.

In the case of Capita Hartshead Limited v Byard, a single actuary was chosen for redundancy and later took their case to an industrial tribunal claiming unfair dismissal. Other actuaries were employed in similar roles and the Tribunal, and later the Employment Appeals Tribunal (EAT), both ruled in favour of the employee, saying that the redundancy pool should have included others in similar positions. The Tribunal’s message was that employers should expect to find themselves open to greater scrutiny if they include only one person in a redundancy pool.

The outcome was different in Halpin v Sandpiper Books Limited, which also reached the EAT. In this case, the employee in the pool of one was the only one based in China, where such work was no longer required. Here, the EAT said that as there were no other similarly qualified possible targets for redundancy, the decision on the redundancy pool was reasonable and his dismissal was fair.

“The upshot is that sensible employers who are looking at redundancy pools should take care, reviewing the position carefully and keeping a record of the decision-making process. And when they go through formal consultation, it makes sense to explain how they made the selection and giving the employee a chance to question the basis, which allows for review and mediation at an early stage,” explained Annalie King.