The government has claimed changes to unfair dismissal rules could save business almost £6m a year amid continued anger from unions over the “attack” on workers’ rights.
Ministers said the qualification period for the right to claim unfair dismissal will be extended from 12 months to two years from April 2012, adding the aim was to increase business confidence to take on more workers.
However, the GMB union published a new study showing most unfair dismissal claims were settled or withdrawn before getting to an employment tribunal.
Fewer than one in four claims to tribunals related to unfair dismissal in the year to March 2010, said the union, adding that extending the qualifying period would not create a single job.
Chancellor George Osborne said in his keynote speech to the Conservative Party conference in Manchester: “I know it’s important to respect employment rights.
“But we also respect the right of the unemployed to get a job and not be priced out of the labour market, and we respect the right of those who spent their whole lives building up a business not to see that achievement destroyed by a vexatious appeal to an employment tribunal.
“So we are now going to make it much less risky for businesses to hire people. We will double to two years the amount of time you can employ someone before the risk of an unfair dismissal claim.”
The Chancellor also announced that for the first time a fee will be introduced for taking a case to a tribunal which litigants only get back if they win, adding: “We are ending the one-way bet against small businesses.”