The government is considering increasing the qualifying period of service for unfair dismissal to two years.
In the 30 years I have been advising on employment law, the qualifying period of service for unfair dismissal has moved from six months, to one year, to two years (for small businesses) to one year.
When it was six months, managers waited until seven months to dismiss. When it was a year, they waited 13 months! Quite often the reason for dismissal existed for weeks or months before the unfair dismissal deadline passed. What would have been simple is made complicated by a few weeks’ delay. Why is this?
Business owners rarely get into business because they are great with staff. Normally they are great at something … that at some point involves having staff for that ‘something’ to reach more people and make more profit. Being human, we put off ‘difficult’ conversations until the last possible moment. Criticising someone’s performance at work, and especially dismissing them, is a difficult conversation for most managers and so it is likely to be avoided or put off.
Whatever the qualifying period of service, businesses can only thrive when they get the performance they are paying for. The critical skill for business owners is to find a way to motivate staff to perform to the right standards. But all too often, the ‘fear’ of employment law obscures the issue. We hear of entrepreneurs who decide not to have staff because of employment law. But nobody refuses to have customers because they don’t understand consumer law!
It is easy for advisors to sell ‘fear’ to small businesses – it encourages them to buy insurance policies, and to retain advisors. Awareness of risk is sensible – we can take reasonable measures to reduce it. But generating fear is counter-productive all round. When we start to act in accordance with our fear rather than the facts, then we get things like people refusing to go out at night for fear of violent crime, even though they are in an area of low crime.
A year is a fair amount of time to find out if someone can do a job. What do we expect to find out in two years that we don’t know in one? Employers need to face their fear of employment law, and make sure they know how to handle performance and other issues. Changing the qualifying period of service doesn’t make the issue go away. Managing people effectively is a key skill for the successful business. And despite what many people say (particularly those trying to get into your wallet), employment law is not to be feared. Use it wisely, and incorporate it into your management processes sensibly, and it is a business friend, not an enemy. And it doesn’t take a ton of paper or impossibly complicated procedures to get it right … those are the mistakes that come from not knowing, not from knowing.
The tragedy is that fear of employment law often encourages businesses to adopt unnecessarily complex procedures that cause rather than solve problems. And that fear often stops people from taking the sensible management action at an early stage that would pre-empt an employment law problems arising in the first place. Thirty years’ experience with our clients from the tiny business to the multinational makes it clear - you don’t avoid employment law problems by insuring, and fear is not a good teacher. You avoid employment law problems by knowing your ground and managing your business for profit.
