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Employment Law: Unfair Dismissal

Volume 732: debated on Thursday 24 November 2011


Asked By

To ask Her Majesty’s Government what plans they have regarding the future of the law on unfair dismissal.

My Lords, recruiting a new employee is an important decision for any employer so we need to balance very carefully flexibility for the employer and security for the employee. The Government therefore intend to increase the qualification period for unfair dismissal from one to two years to help give firms the confidence to take people on. We will also be seeking more evidence, particularly on whether further steps in this area would help boost the confidence of micro-businesses to employ people.

Why is the noble Baroness so mealy-mouthed about this issue? It is a disgraceful report, allowing employees to be dismissed without any explanation at all. Adrian Beecroft—a multimillionaire, venture capitalist and donor of more than half a million pounds to the Conservative Party—said that some people will be dismissed simply because their employers do not like them. Is that acceptable?

We are concerned with the aim of extending the qualifying period in order to improve business confidence in recruiting staff and giving more time to getting the work relationship right. That is why we are doing it. I do not know how I can respond to the other part of the question. Adrian Beecroft was asked to contribute his thoughts to government to support our work examining the burden of employment-related law and he gave them. There are things in there that I think might be very much his own personal viewpoint, because that is what he was asked to give.

My Lords, is not the issue here one of maintaining a balance between those who are in employment and fortunate enough to have jobs and those who are looking for employment and could be taken on if employers were readier to take the risk? The risk of having a case taken to an employment tribunal actually deters a lot of new recruiting, particularly by small firms.

My noble friend of course has long experience in this House and I am delighted to hear him ask a question. It is worrying that small companies tell us that they are nervous about employing people. That should not be the case. We need jobs for our young people and for people who have been long-term unemployed. We need our new, coming companies to be confident to employ people. I have been an employer at a small company and a large company, and extending this period means that you have time to get used to each other and to learn the job. Very often people take more time than others to get used to that. We do not think a year is long enough and therefore we will be extending it to two.

Drawing on my own industrial background, I put it to the noble Baroness that two years is far too long. We have come a long way from the days when a worker who had a complaint was told, “If you don’t like it, there’s the door”. We are in danger of going back to those days.

Other rights, including “day one rights” such as the right not to be discriminated against, are unaffected and will continue to be so. We are trying to see whether this particular piece of work will get more people into employment and will work for smaller companies, which are nervous and which do not very often have big HR departments to help them. We need to get the trust back between the employer and the employee and I think that this will be a good way to do it.

My Lords, the Minister has spoken about the need to create more employment for young people. How is the Minister going to ensure that new employment opportunities for young people are not achieved at the risk of displacing the employment of older people?

That is a very interesting question. We are obviously serious about tackling youth unemployment. We have very high youth unemployment. But I am slightly older, and am still employed, and I would like to continue to be so, if that is possible. The balance is that the employer will use the talent that he has got to keep his business profitable. If his business is not profitable and he goes out of business, then nobody has a job.

Would my noble friend remind the House of the period for which an employee has to work before he or she is completely free to break their contract of employment by going on strike, as we shall see many civil servants do next week?

Gosh. I am afraid that I do not have the details of the answer to that question, but I will write to the noble Lord.

My Lords, can the Minister explain how watering down people’s rights at work by doubling the service requirement to claim for unfair dismissal from one to two years is a substitute for a credible plan for growth? As the Chartered Institute of Personnel and Development, the professional body, has confirmed, that is not the way to boost jobs and growth. There is no empirical evidence to suggest that such a move will boost job creation and it is highly likely that this change will lead to more people bringing discrimination claims instead, which have no service requirement. Can the Minister confirm that the two-year proposal is part of a consultation process? She seemed to be describing it as a done deal.

Yes, it is part of a consultation process, and we believe it is the way forward. The previous Government did not, I think, have a particularly good record. This has become more and more of a question, and we feel that ACAS and other bodies that can help in discussions before problems get too large would be a much better way than having to lose a job, start a job and have a relationship between an employee and an employer that is not working. We think that there are ways to do this other than going to court.