In their manifesto, the government committed to making several rights available from day-one in a role. But this proved one of the most contentious issues, in particular concerning protection from unfair dismissal. So, now that the Act has passed, what will happen?
Day 1 rights
From 6th April 2026, employees will be entitled to paternity leave and unpaid parental leave from day one of employment.
Bereavement leave is expected to take force in 2027, and will also be available from day one. This provides the right to one week’s leave to anybody who is bereaved, while bereaved parents will still be entitled to two weeks’ leave.
Unfair dismissal
The government initially intended to offer protection from unfair dismissal as a day one right. However, there was concern that this could put companies off hiring, which would be a much bigger commitment without a period to assess new starters. The Federation of Small Businesses suggested that this “increased risk will inevitably deter small employers from taking on new people, for fear of facing an employment tribunal simply because a new recruit turns out to be unsuited to the role. That’s bad for jobs, and a barrier to growth and investment.”
The government considered a statutory probation period, to provide a middle ground allowing employers to dismiss new staff following a “lighter-touch” process. However, the House of Lords refused to accept the amendment, arguing that it was unnecessarily complicated.
Instead, from January 2027, employees will be entitled to protection from unfair dismissal after 6 months of employment. This improves protection, while still allowing employers some time to act if a new employee isn’t meeting expectations.
During these negotiations, an amendment was also made to remove the cap on compensatory awards for unfair dismissal.
What impact will this have?
It is estimated that an extra 1.5 million parents will be able to take unpaid parental leave, and 32,000 more dads and partners will be able to take paternity leave.
The 6-month waiting period for protection from unfair dismissal does reduce the risk to employers of hiring. However, it will mean that a lot more people are able to bring unfair dismissal claims, and so employers could face more claims. The government's impact assessment estimates that an extra 6.3 million employees will be protected from unfair dismissal.
In practice, the removal of the cap on compensatory awards is likely to affect only the highest earners.
How should employers prepare?
You should update your policies by 6th April to recognise new day 1 rights.
It is always sensible to get an employment solicitor to update your policies and contracts, but especially as the law is new. Consider when might be the best time for this and factor it into your budget.
You will also need to update your disciplinary and dismissal policies by January 2027. With the shorter waiting period, you might consider more intensive inductions and probationary processes, so that you can judge a new-starter’s performance in the first 6 months.
Read more about the key changes in the Employment Rights Bill, and how employers can prepare.
Share this post:
