Millions of workers to gain rights from Day 1

 

The Employment Rights Bill will remove these qualifying periods, making these rights available from day 1 of employment.  

 

The ‘Next Steps’ document also lists Bereavement Leave, which will be extended so that anyone who is bereaved is entitled to one week's leave (those losing a child will remain at two weeks). 

 

The document also references flexible working as a default. Workers already have a day 1 right to request flexible working arrangements, so it seems any changes will apply to everybody, without re-introducing a waiting period. 

 

 

It is estimated that this will benefit around 9 million people (the number who currently have less than 2 years’ service) at any one time, though this number may fluctuate depending on the rate people change jobs. This means an increase in the number of tribunal claims is likely – not just for unfair dismissals, but disputes around the application of paternity, parental and bereavement leave. 

 

However, it is the potential rise in unfair dismissal claims that seems to be causing the most concern for employers. 

 

Currently, if a new employee does not meet expectations or suit the role, there is little risk in dismissing them within their first 2 years employment. Unless the worker can show that the dismissal was due to a protected characteristic or an automatically unfair reason such as whistleblowing, the employer is unlikely to face a legal claim.  

 

But once employees have protection from day 1, this will become far more risky. 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.” 

 

 

In response, the Business Minister has confirmed probationary periods will remain as a period for assessing new hires. 

 

Around 70% of employers already include a probation period in their contracts, mostly 6 months or less. The impact is limited, as those affected cannot claim for unfair dismissal. Usually the only change after ‘passing’ probation is that the employee becomes entitled to a longer notice period or staff perks. 

 

This new probationary period will be set out in statute, rather than employers and employees making their own contractual arrangements. 

 

The Employment Rights Bill currently does not give any detail about how this probation period will work. The government has committed to hold consultations about the probationary period, meaningful safeguards during this period, interaction with relevant Acas codes of practice, and the potential compensation for unfair dismissal during probation. The outcome will likely be reflected in amendments to the Employment Rights Bill. 

 

As a starting point, the government has suggested a period of 9 months, during which employees who are not right for the job could be dismissed following a “lighter-touch” process. This could consist of a meeting with the employee (who could choose to be accompanied by a colleague or trade union rep) to explain the concerns about their performance. 

 

Once the probationary period is over, employees will have the right to written reasons for dismissal (currently, employees must also wait two years for this right). 

 

The government will also consider how damages will be awarded when an employer has not followed this procedure. Such damages may be lower than the existing damages for unfair dismissal. 

 

Employers will still be able to use contractual probationary periods for job perks. 

 

 

The government has made clear that the reforms to unfair dismissal will not come into effect until at least Autumn 2026. Until then the current qualifying period will continue to apply. 

 

Workers hired after Autumn 2024 may not have to wait the full two years for protection from unfair dismissal. Employers may wish to bear this in mind when recruiting and managing new hires. 

 

Longer-term, employers will need to update their employment contracts and their policies around recruitment, performance management and capability. Set out your processes and your expectations – this may help you to explain the grounds on which a new hire is unsatisfactory. 

 

You will also need to update policies relating to other day 1 rights, such as flexible working, paternity leave and family leave policies. 

 

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.