Trusts face ‘litigation spike’ because of Labour’s planned reforms

Labour’s employment law reforms could trigger a “spike in litigation” against trusts and create other significant challenges for managers and HR teams, senior lawyers have warned.

The government’s Employment Rights Bill will be brought before Parliament this October. It follows the Labour party’s manifesto pledge to introduce new employment legislation within the first 100 days of winning power.

The proposed reforms will likely be based on commitments set out in a green paper called A New Deal for Working People,  published earlier this year.

They are expected to include abolishing the current two-year qualifying period for unfair dismissal rights, instead granting them to employees from day one, and doubling the time limit for bringing statutory employment claims.

Senior lawyers have told HSJ the proposed changes have significant implications for the NHS, including for managers and HR departments as well as legal teams.

Alastair Currie, a partner and head of NHS employment at law firm Bevan Brittan, said: “At the moment, it takes two years before employees have the necessary service to bring unfair dismissal cases. If the qualifying service is removed… this will potentially result in a further spike in litigation.”

He added NHS organisations could potentially have “even more substantial caseloads” because of the reforms.

The significant strain which could be placed on trusts’ HR departments could have wider repercussions: if HR departments are forced to focus on litigation, then they will be “less able to deal with workforce issues, which is pretty important for most NHS organisations,” Mr Currie warned.

The senior employment lawyer also said claimants could have up to nearly eight months to bring a claim under the reforms, significantly longer than at present.

Individuals currently have three months to bring a claim, unless they start an independent Advisory, Conciliation and Arbitration Service early conciliation process, which extends the period to about five and a half months.

He added: “Together with the proposed change to remove the qualifying service requirement, the extension of time limits is quite likely to increase the number of claims, because a substantial proportion are either not brought in time and are therefore struck out, or employees miss the time limit and decide not to bring claims.”

Another senior partner at a top-rated law firm told HSJ the reforms could mean managers facing more time responding to legal matters and it was likely “a lot more processes around dismissals” would be needed.

The respected lawyer, who declined to go on the record, also warned the new laws could inhibit the use of short-term contracts, such as those used for filling immediate staffing gaps or delivering short-term projects, as well as create “more management challenge for HR teams”.

They said: “If people are moving on in that first year, year and a half, it will increase the number of claims that we see.

“That in turn impacts management time, because every time they have a claim, it’s not just the HR time that they get together, it’s the manager’s time in responding to the disclosure requests engaging with us, preparing the case, preparing the witness statement, coming to the tribunal to give evidence [etc]…

“We’re going to have to put a lot more processes around those dismissals.”

A pre-election survey by the Chartered Institute of Personnel and Development found just 5 per cent of employers wanted to abolish the qualifying period completely.

Out of 2,000 respondents, 46 per cent favoured keeping it at two years, while 39 per cent were open to a shorter period of one year, six months, or less.

NHS Employers did not comment and the Department of Health and Social Care passed HSJ’s enquiry on to the Department for Business and Trade.

A DBT spokesman said: “We will introduce basic individual rights to protect workers against unfair dismissal from day one, ensuring they are not fired arbitrarily and ending the current system that leaves them waiting up to two years to access them.

“However, it is crucial we get the balance right which is why employers will still be able to use probation periods to assess new staff and we will consult fully with workers, business and civil society before new laws come into effect.”

UPDATED, 10.15am: This article has been updated to include a comment from the Department for Business and Trade