Osborne confirms increase in qualification period for unfair dismissal claims

Chancellor George Osborne has confirmed an increase in the qualification period for unfair dismissal claims from one to two years in a speech to the Conservative party conference today. The change will come into force on 6 April 2012.

The introduction of fees of £250 to lodge a claim and £1,000 on listing have also been reported. The MoJ said only that these would feature in a consultation document published by the end of November.

Business secretary Vince Cable said the changes to the unfair dismissal rules would save the government almost £6m a year.

'Businesses tell us that unfair dismissal rules are a major barrier to taking on more people,' he said. 'So today we have announced that only after working for the same employer for two years can an employee bring an unfair dismissal claim.

'A key part of the government's growth strategy is to create the conditions which allow businesses, particularly SMEs, to grow and expand by reducing regulation and maintaining a flexible and dynamic labour market.

'Over the past 18 months, the government has started a fundamental employment law review to ensure that it is fit for purpose, that it properly balances the needs of employers and employees, and provides the competitive environment required for businesses to thrive.'

However, Victoria Phillips, head of employment rights at trade union law firm Thompsons, said: 'This is a complete sop to the business lobby and gives employers the green light to employ staff for one year and 11 months before getting rid of them.

'And all to save less than £6m. The government has conceded that it will only reduce claims by 2,000 a year '“ there is absolutely no justification for it. 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.'