Tessa Harris, Employment Law Director at Redmans Solicitors, comments on the recent changes made to the Employment Rights Bill, and advises employers on how they can prepare for inevitable changes to unfair dismissal laws.
A hot topic for any Employment Lawyer has been the Labour government’s proposed Employment Rights Bill. The Bill put forward several new and amended laws which would subsequently impact the current legislation governing employment law.
Arguably, the most significant proposal is that of the day one rights, namely that employees would have the right to pursue a claim for unfair dismissal against their employer from day one of their employment.
As a reminder, under the current Employment Rights Act 1996, an employee can only pursue a claim for unfair dismissal (and other claims such as constructive unfair dismissal) once they have two years of continuous service with their employer.
Labour’s Bill
Unsurprisingly, Labour campaigned for significant changes to current employment rights prior to the general election, including a review of the requirement for two years’ service to pursue a claim for unfair dismissal. As a result of Labour being successful in the general election, the Employment Rights Bill 2024 was created, which confirmed the party’s proposal.
The Bill proposes to remove the two-year requirement for most employees, granting unfair dismissal rights from day one, and if successfully passed through parliament, would be expected to take effect from Autumn 2026.
It’s proposed that the new rules will include a statutory probationary period, during which a different, lighter-touch standard may apply for dismissing unsuitable employees, thus giving some leeway to employers. As can be seen, the proposal is largely focused on protecting employees from being dismissed without fair reason during those initial stages of employment, leaving employers with a harder task of dismissing those who may not be quite the right fit for their organisation or company.
Along with this proposal, there have been concerns from practitioners about the impact this will have on businesses. The additional work involved is particularly going to impact small business owners, and there will also be a likely influx of Tribunal proceedings being brought. It was therefore anticipated that the House of Lords would be critical of the day one right and look to provide alternatives, which they incidentally have done.
House of Lords’ recommendations
The Employment Rights Bill went to its first reading in the House of Lords on 14 March 2025. As anticipated, the House of Lords rejected the proposal, but instead of rejecting it outright, it backed a six-month qualifying period, replacing the current two-year period.
The House of Lords averred that a six-month period provides a better balance, giving employers reasonable time to assess new hires without creating excessive risk. This would, in turn, mitigate the chances of employers holding back on hiring (thus adversely affecting the economy and unemployment rate) and equally reduce the impact this would have on Employment Tribunals.
Recently, the Lords’ recommendations were rejected by MPs.
As the bill reaches its final stages, recommendations are being reconsidered as we wait for both houses to agree before the bill is granted Royal Assent.
Preparing for change: key points for employers
At present, we still don’t know which way this matter could turn. There is still a chance that day one rights could take place. It is possible that a statutory probationary period may also be implemented. Either way, it is certain that the current two-year continuous service rule is not going to last.
It is therefore important that practitioners and employers alike start planning as the change is inevitable.
Rigorous interview processes
Changes to unfair dismissal laws will likely mean that employers may need to reconsider their interview processes. They should consider whether their processes or stages are rigorous enough to determine whether the candidate or applicant is suitable for the post.
This could include introducing tests to determine understanding of the industry and several face-to-face interviews conducted by different members of staff who would be involved in that candidate’s potential employment.
No interview process will be perfect, but the more exposure an employer can have to a potential candidate, the more likely they will gain a better idea of that person’s likely ability and fit for the business.
Reference requests
It may be that reference requests become more important, and the common request for merely factual references may not suffice.
More detailed information could be required to see whether previous employers have any information to suggest that the person could be a good or bad fit for the business. Of course, with this, there could be some pitfalls, such as allegations of breaches of confidentiality, less favourable treatment or employers having a policy that does not allow them to provide any further information apart from the basic employment information.
Changes to handling of new staff
In addition to the above pre-employment processes, to best prepare employers for the employment of new staff, businesses should be focusing on improving their early-stage documentation, like feedback and performance management policies.
It is important to make it clear exactly what is expected of new staff from the outset. This could include:
- Ensuring that a job description is drafted that either reflects the objectives and/or the responsibilities of the role. This is important because, if an employee is not performing to the standard expected, employers will either need to evidence this immediately and implement a fair performance review process or make a decision to dismiss before the unfair dismissal qualifying period is reached (if applicable).
- Setting out clear, measurable objectives, which can be objectively assessed.
- Maintaining clear and accurate records of the employee’s measurable objectives with targets and goals within structured one-to-one forms.
- Introducing regular one-to-one meetings with employees and their line manager or supervisor. This could be key to identifying any issues or trends that are arising.
In addition, increasing the number of one-to-ones in the initial stages of employment may be useful. This could show that, as a company, the employer is doing everything to support an employee during this embedding period.
Reviewing performance management policies
Employers should equally consider reviewing their performance management policies. These will need to be amended to take into account any reduced qualifying period and to cater for new employees in the initial periods of their employment or probationary period.
Again, making sure that the performance management policies are clear, concise, measurable and accurate is key. Moreover, seeking legal advice on these could be helpful, particularly as the performance or suitability of the employee is most likely to be the reason an employer seeks to dismiss so early on in employment.
Final thoughts
Overall, whilst no changes have yet been made legally, employers should not be fooled into thinking that changes won’t happen, or that it is a long way from being implemented. A change will happen; how that looks is yet to be decided, and it will be upon employers before they know it.
The key is to start thinking about the potential impact future changes could have on businesses now. Consult with your HR team and/or senior management to look at what changes need to be made to safeguard businesses going forward against possible litigation, as there is certainly more of a risk in respect of this.
Seek legal advice on what businesses already have in place, as well as what can be additionally implemented. The objective is to ensure that companies, large or small, are ready for the change when it hits. Being proactive will allow employers to feel more at ease with hiring new staff going forward, thus avoiding potential ramifications from occurring.
Tessa Harris is the Employment Law Director at Redmans Solicitors. She focuses on litigation, particularly in areas like disability discrimination and absence management.
Photo by kaushik26795 from PxHere.
