The Employment Rights Bill (the Bill), which had its first reading on 10 October 2024, introduced proposals for significant changes to employment law in the coming years. You can read our overview of the Bill here.
In this article, we focus on one of the most significant changes in the Bill: the removal of the current qualifying period for unfair dismissal, making it a ‘day one’ right – and the practical steps employers can take to prepare.
How is the law changing?
Currently, subject to certain exceptions, an employee must have two years’ continuous service with their employer to bring a claim of unfair dismissal at a tribunal.
The Bill proposes to remove the two-year qualifying period for unfair dismissal claims, converting it to a ‘day one’ employment right.
These proposals are still subject to change, as the government plans to conduct a series of consultations. We do not anticipate the proposed changes to unfair dismissal taking effect until Autumn 2026.
Introducing the ‘initial period’
The Bill introduces the concept of an ‘initial period of employment’, serving as a new statutory probationary period. While the exact length has not yet been specified, the government has indicated a preference for this period to be nine months.
The standard of reasonableness for dismissals during the initial period of employment will be modified, and a ‘lighter touch’ dismissal process will apply for employers who want to dismiss an employee for reasons relating to conduct, capability, illegality, or ‘some other substantial reason’.
It is anticipated that the ‘light touch’ approach will not apply to redundancy dismissals. Employers making staff with under nine months’ service redundant will therefore need to follow a full process to avoid a finding of unfair dismissal, although the right to a redundancy payment will still be subject to the employee having completed two years' service.
Regarding the process, it is not yet clear what the ‘light touch’ approach will entail, although the government has suggested it may include a meeting with the employee to discuss performance concerns. The employee will have the option to be accompanied by a trade union representative or a colleague at the meeting.
The ‘light touch’ process will also apply if the employee is given notice of dismissal during the initial period but continues to be employed after it, provided the termination date falls within three months of the end of the initial period.
What does this mean in practice?
Whilst immediate action is not required until further details are confirmed, employers should be mindful of the following:
- Proactively managing probation periods: Performance metrics for different roles should be clearly defined, allowing employers to demonstrate when employees are under performing. Effective management and documentation of concerns regarding new starters’ performance or conduct will become increasingly important, as written records of probationary reviews will serve as evidence of the reason for dismissals during the initial period of employment. It will also be important to plan ahead and consider additional training for managers, with particular focus on methods of supervision during probationary periods. Probation reviews should be clearly diarised and followed up.
- Notice period in the first year: It will be important to set reminders in advance of probation periods ending, so that notice can be given in a timely manner, if required.
- Review of pre-employment processes: The effectiveness of pre-employment screening, interviews, and selection processes should be regularly reviewed to minimise the risk of hiring unsuitable candidates.
Comment
Carla Codona, Solicitor in our Employment team, comments:
“The two-year qualifying period remains in place until Autumn 2026 at the earliest, so there is no immediate requirement to make changes. Even once the details are confirmed, we expect employers will be given a ‘substantial period’ to prepare and adapt.
"With that in mind, it is worthwhile for employers to begin reviewing recruitment practices now and consider ways to improve them, as well as assess how employees are managed during probationary periods and the supporting infrastructure. Early consideration of these changes will make the process smoother.”
To discuss any of the points raised in this article, or if you have questions about the Bill, please do not hesitate to contact a member of the Lindsays Employment team.
