British business could save £6 million a year from changes to unfair dismissal laws that will come into effect next year, the government claims.

British business could save £6 million a year from changes to unfair dismissal laws that will come into effect next year, the government claims.

Under reforms announced by Business Secretary Vince Cable and Chancellor George Osborne, the qualification period for the right to claim unfair dismissal will be doubled so that an employee must have worked for a company at least two years rather than one.

These changes follow the ‘Resolving Workplace Disputes’ consultation, which was published in January this year and proposed measures to encourage early resolution of disputes, and are part of the government’s workplace reforms.

The reforms aim to increase business confidence to take on more staff and it is felt that the new proposals will see the number of unfair dismissal claims drop by around 2,000 a year.

Cable remarks, ‘Businesses tell us that unfair dismissal rules are a major barrier to taking on more people.’

He adds, ‘We have one of the most flexible labour markets in the world, but there is more we can do to give British business the confidence it needs to create more jobs and support the wider economy to grow.’

Over the past 18 months the government has started the Employment Law Review, a review of all aspects of employment law, and these particular changes to unfair dismissal laws will come into force on 6 April, 2012.

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