In the lead up to the 2024 general election, Lindsays are launching a series of articles focusing on the potential changes to employment law that a new government may bring, and the best practices employers need to be thinking about now.
Ben Doherty, Partner and Head of Employment Law at Lindsays, presents our first topic - the introduction of ‘day one rights’ and the impact this could have on businesses both large and small.
The Labour Party has committed to deliver the “biggest upgrade to rights at work for a generation” if it wins the election. It has also pledged to act on this relatively quickly after it comes into office, starting the process of introducing new legislation within its first 100 days.
Day one rights
Under current law, many employment rights don’t begin until staff have completed two years’ service. These include the right to bring an unfair dismissal claim, which means that if an employer makes a mistake when recruiting a new start, they can undo that mistake relatively quickly and safely by dismissing the employee on notice, which is frequently limited to 1 week. The employee can’t bring a claim for unfair dismissal as they don’t have 2 years continuous employment.
Labour’s proposed New Deal for Working People wants this right (along with other rights such as sick pay and parental leave) to kick in on ‘day one’. So, even with very short-service staff, employers would have to follow a fair dismissal process when letting them go or face the prospect of unfair dismissal claims.
The impact on employers
This change will increase the risk for employers who will need to be able to identify the reason for the dismissal and simply stating “it’s not worked out” won’t be sufficient. More importantly it will also increase managers’ workloads as they will need to follow a fair process when dismissing.
Currently an employer who has concerns about a long serving employee’s performance will try to improve that performance over a review period that could last anything from 2 to 6 months. We don’t know whether Labour will expect a similar process for an employee with short service but it is clear that some form of process will be required, and we are hopeful that a shortened process will be acceptable.
The importance of probation
The Labour Party says its proposals won’t “prevent fair dismissal, which includes dismissal for reasons of capability, conduct or redundancy, or probationary periods with fair and transparent rules and processes”. A well-advised employer should consider taking the following steps:
- Be more careful in your hiring and vetting processes, since each new start could potentially claim for unfair dismissal immediately.
- Ensure that every new employee has a contract with a probationary period. We recommend a 6-month period with the option to extend it by a further 3 months.
- Check whether your existing policies state that they don’t apply to employees during their probationary period and if not, consider adding that to your policies now.
- Consider how your policies could be shortened for employees in a probationary period.
- If you’re open to unfair dismissal claims from an employee’s first day, you will need to step up several gears on your record-keeping for short-service staff on performance, conduct, capabilities, absences, disciplinary procedures, and improvement opportunities and so on – to the level you should already have with staff of two years’ standing. We’d advise sensible habit-forming on this as soon as possible and to encourage managers to establish effective routines in evidence gathering to support any concerns they have about a new start’s performance and conduct.
What else you can do
Those are the first steps that employers should take. But if Labour does gain power and makes radical changes on employment rights, there’ll be much more required to manage and reduce employment law risk.
Very few SMEs, charities and other employers will have the time or legal expertise to process new legislation, digest what it means for their own policies and processes and change them accordingly. So, in the run-up to the election and beyond, Lindsays will keep you informed with this new series of articles on upcoming employment rights changes. As well as helping you follow the proposals as they are consulted upon and made into law, we’ll share practical ideas on what employers need to do and when.
There’s also another way to keep up to speed as the detail gets released, and to ensure that you have access to relevant bespoke up to date policies, guidance and 24/7 advice. Through the employment law solutions available through Lindsays’ prism service, you can have all this at your fingertips for a fixed fee.
So, while no one knows exactly what lies around the corner in terms of the election result or what it will mean for day one rights, there is at least some certainty ahead – that prism can help you manage the risks and access answers, and for a fixed fee too. If only the other aspects of recruitment could be so predictable.
Ben Doherty
Partner and Head of Employment at Lindsays
Keep checking the Lindsays website for more articles on the proposed changes to employment law in the run-up to the election.
Published 17 June 2024
