The reforms under the Employment Rights Bill are significant to unfair dismissal rights. Under this bill, employees gain the right to claim unfair dismissal from the first day of their employment, eliminating the current two-year qualifying period. The change is expected to take effect in Autumn 2026, but its impact begins now as all new hires will gain unfair dismissal rights from the date that this change takes effect.
This reform means that employees will be able to challenge dismissals from day one, removing the previous two-year qualifying period and making probationary periods more critical than ever.
The bill makes no reference to probationary periods but instead creates a new concept of ‘initial periods of employment.’ During this initial period, an employer must still establish a valid reason for dismissal related to conduct, capability, a statutory ban (such as not being entitled to work in the UK), or another substantial reason specific to the employee to ensure the dismissal is fair. The process required for such a fair dismissal will be less stringent compared to standard procedures, but the specifics of this procedure are still to be confirmed. However, redundancy dismissals are excluded from this “lighter touch” approach. If an employer makes an employee redundant on the first day, they must adhere to the usual fair process to avoid an unfair dismissal claim. The two-year qualifying period for statutory redundancy payments remains unchanged.
In relation to action required now, employers should keep their contractual probationary periods under regular review and consider aligning them with the anticipated initial period of employment in due course. Additionally, employers should focus on developing strong performance assessment processes for early employment stages and ensure managers are trained to use these effectively in preparation for the upcoming legal changes.
The Employment Rights Bill represents some of the most significant shifts in employment law in recent years, and employers must prepare for these changes. Lucky for you, we are here to help! If you would like any advice on how to prepare your business for the upcoming changes, please contact a member of the team.