It has been announced by the chancellor of the United Kingdom that the government intends once again, to increase the qualifying period for rights not to be unfairly dismissed (in terms of the Employment Rights Act, 1996 ) from one to two years continuous employment. This will take effect as from the 6th April 2012 and it is rumored at this stage to only apply prospectively. That is to say it will not apply to those already employed as at the 6th April 2012. The stated reason for this change is that it is thought that this will increase small employers confidence to employ more people and therefore reduce unemployment and stimulate growth.
The question which I examine here is whether this extension to the qualifying period may be successfully challenged. This question comes to mind because this is not the first time that the qualifying period has been extended to two years. Prior to 1985, the qualifying period was one year. This was changed in 1985. This extension was challenged in the matter R v Secretary of State for Employment, ex p Seymour-Smith. The basis for the challenge was that because the two year qualifying period had a disproportionate effect on women as opposed to men, this constituted indirect discrimination on the basis of sex and as such violated the Equal Treatment Directive. The Court of Appeal agreed and quashed the extension. However on appeal the House of Lords, after seeking rulings from the ECJ, overturned the decision on appeal. However by this time, the government had reduced the qualifying period to one year and the matter was laid to rest. The impending changes thus once again raise the specter of a fresh challenge. The question is whether such a challenge would have a chance of succeeding in light if the decision by the House of Lords in the Seymor-Smith decision. percentage
The first point to note about the decision is that the House of Lords found that article 141 of the EC treaty was applicable and not the Equal Treatment Directive. The House of Lords, acting on the rulings by the ECJ, held that in order for such a claim to succeed, the claimants must be able to show that there was a considerable difference between the percentage of employed men who met the qualification and employed women who met qualification. Furthermore that such a difference was constant and persistent. This is in my view the ratio decidendi of the House of Lords ruling and the principle remains good law. The majority of the House of Lords found on the facts that while there was a constant and persistent difference, the difference was not large enough to be considered considerable. The court found that the statistics between the years 1985 - 1991 (between the time that the period was extend and the date when the claimants were dismissed) showed that for every ten men that qualified only nine women qualified. I have not researched the recent statistics but this figure is unlikely to have improved given the fact that due a variety of factors including family commitments, more women tend to be employed on short fixed term contracts than men. There is every likelihood that provided the statistics are supportive, this hurdle may be surmounted. It is also possible that the ECJ may come to a different conclusion on the same facts.
However, even if it can be shown that the order extending the qualifying period does have a disparate or disproportionate effect on women, this is not the end of the matter. As argued by Lord Nicholls in the Seymour-Smith decision, the state may still show that the disparate impact is objectively justified by the legitimate aim of the extension. The test is whether the order seeks to achieve a legitimate aim and (because we are dealing with state as opposed to private action )that the member state reasonably considered the means chosen to be suitable for achieving that aim. In a dissenting judgement in the Seymour-Smith decision, Lord Nicholls held that there was a disproportionate impact on women but that it was objectively justifiable because the extension sought to achieve the legitimate aim of encouraging employment and there was 'some' evidence supporting this contention. I believe that it is the justification defense that would provide the sticking point for a challenge to the extension of the qualifying period. What presents a particular difficulty for a claim that the order indirectly discriminates is that the state is given a wide discretion as to how they seek to achieve a legitimate end. The state may have little evidence that the extension of the qualifying period would increase employment but because of the degree of deference applied by the judiciary, this may be sufficient. It seems to me that it may be better to try find some sort of other incompatibility between the order for extension and some other EC instrument. In the end, the success or otherwise of a claim that a order extending the period from one to two years will primarily depend on the empirical evidence supporting the claim that the extension will increase employment. If the is no such evidence, then there is a significant chance that such a claim may succeed. If there is some evidence, although this may not be definitive or convincing, such a claim is unfortunately likely to fail. It would certainly be interesting for someone to analyze the impact that the last extension to two years had on the employment rate all other things being equal. The current governments claims in this regard may like many other claims it has made, may just be found wanting.
