Unfair Dismissal and the Employment Rights Bill
Key Contact: Chris Aldridge
The press has been abuzz over the past week with the first look at the government’s much vaunted Employment Rights Bill.
In particular, Clause 19 has attracted much attention, because it marks a significant change in the application of unfair dismissal protections.
Claure 19 and unfair dismissal protections
Clause 19 eliminates the two-year qualifying period, so that employees benefit from unfair dismissal safeguards from their very first day in post.
As it stands, employees cannot file an unfair dismissal claim until they have been in their role for two years, except in cases involving whistleblowing or discrimination.
Especially of note is the government’s own estimation that around 9 million additional employees will be eligible to file unfair dismissal claims.
Reform to the probation period
Businesses must now re-think their probationary period – typically seen as a six-month period of appraisal before the role is formalised, during which unfair dismissal protection would obviously not apply.
The government is mulling an extendedstatutory probationary period to up to nine months, and a potential consultation about dismissals during this period, although this has not yet been decided upon.
How would unfair dismissal claims be handled during probation?
There are a few options:
- Dismissals during probation could automatically beconsidered fair unless they are clearly entirely unreasonable.
- A formal, transparent and fairprobationary dismissal process could be required, including steps such as holding a meeting, outlining concerns, and allowing the employee to respond.
What do employers need to do right now?
First, don’t panic! Despite the eye-catching number of potential additional claims, the government plans to mitigate this by consulting on potentially reduced compensation for successful claims.
In addition, the Bill would not be implemented until autumn 2026 – so now is a good time to begin preparing for the changes.
Such preparations should include:
- Review current probationary procedures to ensure they are comprehensive and well-documented.
- Ensure regular performance monitoring and ensure timely decision-making during the probationary period.
- Be aware that redundancy-related dismissals will not be subject to the more lenient approach indicated by the government for performance-related probationary dismissals. This will be important for businesses under financial distress to bear in mind.
For help in understanding the implications of the Employment Rights Bill for your business, contact our Employment team.
