Around 2.7 million workers at increased risk of losing their jobs when unfair dismissal law changes, warns TUC

date: 2 April 2012

embargo: 00.01hrs Tuesday 3 April 2012

Around 2.7 million workers across the UK could face an increased risk of losing their jobs when the government increases the qualifying period for protection from unfair dismissal from one year to two years on Good Friday (6 April).

The TUC is concerned that this change in the law will also increase job insecurity, discriminate against younger workers, part-time women workers and employees from black and ethnic (BME) communities, and encourage more of a 'hire and fire' culture in the UK.

The government argues that watering down unfair dismissal rights will help to boost recruitment and help companies grow. However, while the qualifying period for unfair dismissal rights in the UK has fluctuated over time, the TUC believes there is no evidence that a shorter qualifying period has led to job losses or has constrained recruitment. Since 1999 when the qualifying period was last reduced from two years to 12 months, more than 1,750,000 extra jobs have been created in the UK.

This change in the law is also not a top priority for business. The Small Business Barometer commissioned by the Department for Business (BIS) and published in October 2011 asked 500 small and medium-sized businesses about their main obstacles to success. The biggest problem (cited by 45 per cent) was the state of the economy, while obtaining finance from the banks was the next biggest issue (12 per cent). After this came taxation, cash flow and competition. Just six per cent of small businesses listed regulation, or 'red tape', as their main barrier to growth.

The TUC believes the changes will have a disproportionate impact on the 2.7 million people working across the UK in temporary and part-time jobs, who risk losing out on unfair dismissal protections entirely.

Women working part-time and employees from BME communities are particularly at risk, as 1.4 million part-time female employees have been with their current employer for less than two years, and only around a third (32 per cent) of all BME employees have had the same employer for less than two years - compared with a quarter (25 per cent) of white employees.

In addition, the increased qualifying period could have a detrimental impact on younger workers - already facing serious difficulties because of record levels of youth unemployment. Nearly two in three (61 per cent) of employees aged 24 and under have less than two years service with their current employer - compared to around a quarter (24 per cent) of employees aged 30 to 40 years and less than a fifth (17 per cent) of those aged 40 to 50 years.

TUC General Secretary Brendan Barber said: 'The government's proposals to weaken unfair dismissal rights risk generating a 'hire and fire' culture in the UK and will lead to the creation of insecure employment which is here today and gone tomorrow.

'Cutting back on protection against unfair dismissal will do nothing to boost the economy. If people are constantly in fear of losing their jobs it will lead to even less consumer spending, and losing your job is one of the worst things that can happen to anyone, especially when unemployment is so high.

'Businesses have told the government that above all they need the economy to be growing and the banks to get lending again. The government appears to be reacting to pressure from backbench Conservative MPs rather than actual business concerns.'

NOTES TO EDITORS:

- All statistics quoted in the press release are from the Labour Force Survey Summer 2011. The extended qualifying period will only apply to employees starting employment with a new employer after 6 April 2012. Nevertheless, the TUC believes that these statistics illustrate the expected longer-term effect of the measure.

- All TUC press releases can be found at www.tuc.org.uk

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk