Changes to unfair dismissal, introduced by the Government to stimulate employment, are now in force but are in danger of being misinterpreted by employers, who must also bear in mind two recent judgements concerning individuals chosen for redundancy when no other employees were put in the pool. 

As businesses watch 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 from one to two years with effect from April 2012.

But the new rules will only apply to those who start in a new job on or after 6th April 2012. Many employers are missing this important detail.

“The change has been put forward by the Government in order to boost employment, hoping that it will give more flexibility on staffing in the long term” said employment law expert Richard Stephens of Vanderpump & Sykes Solicitors.  “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. This will be needed if disciplinary action ever has to be taken against the employee.

He added:  “As the start of the employment year, April is a good time to check that all  internal practices and procedures 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.

Two employment tribunal rulings have recently hit the headlines and look set to provide further procedural challenges to employers in future.They both involve ex-employees who brought unfair dismissal claims against their former employers after being the only employees in the “redundancy pool”.

In the case of Capita Hartshead Limited v Byard, a single actuary was chosen to be in the pool.  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 person based in China, where such work was no longer required.  Here, the EAT said that as there were no other similarly qualified possible candidates for redundancy, the decision about 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, review the position carefully and keeping a record of the decision-making process.  When  going through formal consultation, it makes sense to explain how they made the selection and give the employee a chance to question this. Such an exercise facilitates review and mediation at an early stage,” explained Richard Stephens.

Provided by Vanderpump & Sykes Solicitors. For legal advice on any area of employment law, contact

Richard Stephens, Partner, Employment.

T: 020 8370 2875 (DDI)