Shropshire firms to be cautious of unfair dismissal reforms

The alert has come from employment lawyer Sally Morris ahead of government amendments which are only days from coming into force on 6th April.

The legal alterations, part of the government’s widely-publicised Growth Strategy and Employment Law Review, will mean that from 6th April new employees will need to have worked for a minimum of two years for their employer before a claim for unfair dismissal can be made.

The government hope the legislation will encourage employers to recruit more new staff which will help kick-start the economy. It is a move business secretary Vince Cable believes will save businesses £6 million and avoid around 2,000 tribunal cases every year.

However, Ms Morris is concerned the changes will increase the number of claims that don’t require someone to have been employed for a set period of time. These are claims which are complex and difficult to defend such as discrimination or whistleblowing.

Ms Morris, head of employment at Telford legal firm MFG Solicitors said: “Mr Cable is making wholesale reforms to 160 pieces of employment legislation but this immediate change, although well intended, will need employers across Shropshire to look behind the headlines and tread cautiously to avoid claims against them.

“The state of the economy has left the county with an extremely challenging job market. It’s a market where unfortunately some employees are increasingly intent on making claims if they believe there is a chance of receiving substantial pay outs from former employers. It’s a situation which could leave many firms exposed.”

Figures show the majority of unfair dismissal claims result in payments of up to £10,000 with a maximum cap on damages of £72,300. However, for discrimination cases, the average compensation can double to around £20,000 with no maximum cap on damages – a potential minefield for Shropshire businesses.

Ms Morris added: “We are at the starting line of a raft of changes to employment laws and I’m determined for Shropshire’s firms to be on the front foot and taking the time to understand the potential slips and trips.

“Whilst I accept that the intention of the government is to increase business confidence, it is clear they haven’t fully considered the potential knock-on effect and how that will cause more concern for employers already bruised after battling through a long recession.

“If they have not done so already, I recommend firms and their HR teams seek professional advice to stay one step ahead.”