How will Probation Periods Affect Protection from Unfair Dismissal?
Author: Sam Evans
Key Contact: Chris Aldridge
At the time of writing, only employees with a continuous service period of two years with their existing employer may qualify for protection from unfair dismissal. If they do qualify, their employer must rely on one of the following reasons according to the Employment Rights Act 1996:
- Misconduct.
- Capability issues.
- Redundancy.
- A statutory requirement.
- Some other substantial reason.
In addition, the employer must also act reasonably when dismissing for that reason and the decision to dismiss must fall within a range of reasonable responses available to an employer. An employer must also follow either their own internal procedures or the Acas Code of Practice.
Previously, the Labour Party pledged to introduce a ‘day one right’ to protection from unfair dismissal for employees as well as for various other rights. However, Labour’s ‘Plan to Make Work Pay’ policy document produced in May 2024 stated that the government would permit ‘fair dismissal’ which included the reasons above as well as ‘probationary periods with fair and transparent rules and processes’.
Following the election, on 18 September 2024, the Financial Times announced that the government would allow employers to use 6 month probation periods to screen new hires and dismiss them if necessary. Whilst this sounds a simple change, it remains to be seen what this will mean in practice. For instance, the government could introduce failing probation as a new fair reason in the Employment Rights Act for dismissal along with conduct and capability. However, such dismissals are likely to require an employer to follow a process and to justify why the employee has failed their probation. Alternatively, it could pass a regulation to shorten the qualifying period to 6 months rather than 2 years (however this would contradict the concept of ‘day one rights’). A final option could involve the government drafting a new Acas Code of Practice addressing probationary periods and setting out guidance about ‘probationary periods with fair and transparent rules and processes’. As well as the new Acas Code, the government could also amend existing legislation so that when employment tribunals consider the fairness of a dismissal, they also need to take into account the fact that the dismissal took place during a probationary period.
Key takeaways
Whilst the latest reports from the Financial Times may be good news for employers, it remains to be seen what procedures employers will need to follow to ensure that a dismissal during a probation period is legal. As a starting point, we would recommend that employers review their existing process and ensure that transparent policies are in place for the probation period and that these are accessible by employees. For instance, ensure that there are probationary review meetings prior to the end of the probationary period and that employees receive written confirmation that they have progressed beyond their probationary period.
It may also be prudent to review any performance management processes and ensure that any employees which are dismissed during the probation period are given regular feedback and support as well as an opportunity to improve as this may be a factor considered by tribunals during future litigation.
Finally, we expect that any such changes will undergo detailed consultation and will in any event require additional parliamentary time to ensure that legislative changes can be passed.
If you need advice with a dismissal, please contact our Employment Team.
