The Employment Rights Bill: reforms of unfair dismissal law
On 10 October 2024, the Employment Rights Bill (the Bill) was introduced in parliament and brought with it several reforms that will significantly alter the employment law landscape in the UK.
One of the most significant changes which has generated much debate relates to unfair dismissal. In particular, the introduction of protection to employees from the first day of employment.
Under current law, an employee must be employed for a two-year period before they can bring an ordinary unfair dismissal claim. To fairly dismiss an employee with qualifying service requires both substantive and procedural fairness. It must be shown that the dismissal falls within a range of reasonable responses and relates to the employee’s conduct, capability, statutory restriction, redundancy or some other substantial reason (SOSR).
Considering the continuous service requirement, employers have been able to dismiss employees within the first two years of their employment without following any process or having one of the five potentially fair reasons, as noted above.
Whilst there have been changes to the qualifying period over time, there has always been a minimum service requirement since the right to claim unfair dismissal was introduced.
The Bill promises the abolition of the two-year continuous service requirement, meaning employees will gain the right to claim unfair dismissal from the first day of employment. It instead introduces an ‘initial period of employment’, which will operate as a new statutory probationary period. During this initial period, unfair dismissal protection will apply, however will be modified to involve a lighter touch approach in relation to conduct, capability, statutory restriction or SOSR dismissals. Further detail relating to the procedure will be set out in the regulations.
For redundancy dismissals during the initial period, it is envisaged that usual unfair dismissal principles will apply from the commencement of employment.
The length of the initial period has yet to be confirmed and will be subject to government consultation; however, a period between 3 to 9 months is anticipated at this stage.
The change is not expected to take effect before autumn 2026 and this therefore gives employers time to prepare. There may also be further change as the Bill progresses through parliament.
In the meantime, and moving forward, it would be prudent for employers to consider:
Carrying out reviews of probationary periods and look at how these are managed to ensure they are robust and properly utilised
Review recruitment processes to ensure they are comprehensive, fit for purpose and help businesses to appoint the right candidates
Consider what training is put in place and provided to new starters during the first few months of employment to encourage positive performance
Ensure managers and decision-makers are up to date on the changes and are trained on managing the probationary period and dismissal processes prior to the changes coming into effect
Contact Lily-Rose to discuss this further.
