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Age discrimination and increasing the unfair dismissal qualifying period to two years

 

Exclusive new research by Lewis Silkin and agediscrimination.info casts further doubt on the Coalition’s “workplace equality” credentials and reveals the age discrimination behind their key employment law proposal.

The current legal position is that employees with more than one year’s continuous service have the right not to be unfairly dismissed (section 94-95 Employment Rights Act 1996).

On 10 November 2010, Lord Young stated that the government was considering doubling this qualifying period to two years. This was confirmed on 27 January 2011 when the Department for Business, Innovation and Skills (BIS) launched a consultation on wide-ranging reforms to employment law: Resolving Workplace Disputes: a consultation (a copy of this is available on the consultation section of our site).

We obtained data from the Office for National Statistics (ONS) relating to the length of service and age of the workforce and sought to assess the impact what sort of impact this proposal would have on various age groups in the workforce.

The research (available to download here) clearly shows that although increasing the qualifying period for unfair dismissal would affect all age groups to some degree, younger people would be disproportionately affected.

Key findings are as follows:

·         3.09 million people will be affected by this change and will lose their unfair dismissal rights, with 56% (1.73 million) of those affected being under 35 and with 44% (1.36 million) of them being under 30.

·         The very youngest members of the workforce will be most affected. Whereas nearly half of all under 20s currently qualify for unfair dismissal rights, this will reduce to just one in five.

·         All those aged under 35 will be disproportionately affected, specifically:

o    44.1% of those affected will be under 30, despite making up just 24.3% of the total workforce.

o    26.9% of those affected will be under 25, despite making up just 13.0% of the total workforce.

A copy of our research can be downloaded here.

Further details on age discrimination related statistics can be found on the statistics pages of our site. These are updated regularly.

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EDIT 24/11/11

Page 123 of the BIS Impact Assessment reveals the Government's position. An extract is below

Age discrimination is somewhat different to other forms of discrimination. Age is a spectrum and continuum along which we all pass and age and length of service requirements are widespread and well established features of employment law - in the UK, EU and beyond.

As Chart A2.3 shows a significantly lower proportion of 25 + year olds have a length of continuous service with their current employer of 12-23 months compared to 18-24 year olds. In 2009 9.9 per cent of 25+ year olds had a length of continuous service with their current employer of 12-23 months compared to 22.9 per cent of 18 – 24 year olds. This suggests a disproportionate number of young workers will be affected by the measure.

However, the difference here essentially reflects the fact that younger people have generally had less opportunity to build up length of service - this is simply a fact of life. We consider that the difference here is essentially a factor of time and that an extension of the unfair dismissal qualifying period would not have a considerable disparity of impact on younger workers.

We note that other accepted labour market practices have age or length of service requirements. UK law has different age bands for the national minimum wage, age and length of service qualifications for redundancy payments, and length of service requirements are allowed for other benefits (blanket exception up to five years) such as pay scales.

In the event that the difference was considered to be a considerable disparate impact, the Government considers that it is justified as a proportionate means of achieving a legitimate aim.

Extending the qualifying period of unfair dismissal to two years should be seen in the context of a wider labour market framework which seeks to minimise burdens on the employment of inexperienced workers and facilitate entry to the labour market whilst allowing for greater experience (and loyalty) to be awarded.

BIS appear to suggest that it is not really age discrimination and argue along the lines of the Homer case - note the comment that it is "simply a fact of life". BIS also seem to suggest that even if it was discrimination, it would be justified on labour market grounds.

For further information, contact Tom Heys