Accompanying report - Employment (Qualifying Period) (Jersey) Order 2014
SUMMARY
This Ministerial Order is made to give effect to the Minister’s proposal to introduce a longer qualifying period for protection against unfair dismissal under the Employment (Jersey) Law 2003 (the ‘Employment Law’).
The Employment (Qualifying Period) (Jersey) Order 2014 prescribes, for the purpose of Article 73(1) of the Employment Law, a 52 week qualifying period where employment commences on or after 1 January 2015. Where employment has commenced before 1 January 2015, the employee will retain the right to claim unfair dismissal after 26 weeks’ service.
BACKGROUND
Article 73 of the Employment Law provides that, to qualify for protection against unfair dismissal, employees must have 26 weeks’ continuous service ending with the effective date of termination, other than where dismissal is on ‘automatically unfair’ grounds which means that an employee is protected against unfair dismissal from day one of employment. The Law permits the Minister to set a different qualifying period by Ministerial Order.
The qualifying periods for protection against unfair dismissal in other jurisdictions are;
- One year in the Isle of Man
- One year in Guernsey
- One year in Northern Ireland
- Two years in the UK[1]
The equivalent qualifying period has often been amended in the UK and it has ranged from 26 weeks to two years since the protection was introduced in 1971. The UK Government’s stated rationale for the move from one year to two years in 2012 was to make a positive impact on business confidence and thereby boost growth.
In 2012, employer representative groups in Jersey expressed concern that our 26 week qualifying period deters employers from employing staff and creating new jobs, primarily due to the perceived risk of an employee making a complaint to the Jersey Employment Tribunal. The Employment Forum consulted on whether the 26 week qualifying period should be extended and recommended to the former Minister in 2013 that, whilst it was not opposed, in principle, to a one year qualifying period, it found no evidence that a longer qualifying period would have a positive impact on employment and job opportunities.
The Chief Minister submitted a statement to the States Assembly on 24 October 2014 setting out his vision for a strategic policy which included a proposal to remain aligned to competitor jurisdictions by extending the qualifying period for unfair dismissal claims. The Minister for Social Security (the ‘Minister’) agreed to extend the period to one year, noting that a longer qualifying period might give an employer the confidence to create new jobs and that it might offset some of the other challenges that employers face, particularly small businesses.
Consideration was given to introducing a qualifying period longer than one year. Whilst the UK has a 2 year qualifying period, our other nearest competitors (the Isle of Man, Northern Ireland and Guernsey) each have a one year qualifying period. In the UK, the risk of an unfair dismissal claim is potentially far greater to an employer because the maximum amount of compensation that may be awarded for unfair dismissal is £90,494 whereas, in Jersey, the maximum unfair dismissal award for an employee with up to one year’s service is 4 weeks’ pay. In addition, the UK has far more extensive ‘day-one’ rights that do not require a qualifying period of employment, including family friendly rights and protection against discrimination based on sex, age, disability and religion. Given the other factors, it was concluded that a one year period is a reasonable period of time in which an employer has the opportunity to assess a new member of staff through the full annual cycle of a new job.
It should also be noted that the proposed move to a one year qualifying period brings a greater variance between employees who work under fixed-term contracts of 26 weeks or less and all other employees. Fixed-term contract employees will able to claim unfair dismissal up to 39 weeks sooner than permanent employees (compared to 13 weeks sooner with a 26 week qualifying period). This is because employees who are employed under fixed-term contracts for 26 weeks or less are protected against unfair dismissal once they have completed at least two-thirds of their contract by the effective date of termination, subject to a minimum of 13 weeks’ continuous service. The 13 week minimum period of service cannot be changed by Order and so a primary law change is expected to amend the position in the longer-term, subject to consultation by the Employment Forum in 2015.
The Minister and the Chief Minister have acted quickly with the intention of giving the necessary support to businesses to boost growth and create employment opportunities for local jobseekers. The change would take effect only in relation to employment that commences on or after 1 January 2015.
Financial and manpower
The financial and manpower impact of these proposals on the States as an Employer is minimal, both in terms of the numbers of employees dismissed and the costs in dealing with their dismissal.
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