The Employment Rights Bill: What employers need to know about “Day-One” unfair dismissal rights

The up and coming Employment Rights Bill is one of the most ambitious overhauls of workplace law in decades.

For employers, one of the most talked about proposals is the removal of the two year qualifying period for unfair dismissal claims, making protection available from day one of employment.

This change has understandably raised concerns among businesses. However, the reality may not be as stark as some headlines suggest, and there are steps you can take now to prepare and protect your business.

What’s Changing?

Currently, employees need two years of continuous service before they can claim ordinary unfair dismissal. This gives employers a level of flexibility in the early stages of employment, particularly during probation periods.

The Bill proposes to:

• remove the two year qualifying period for unfair dismissal, giving employees the right to claim from day one
• introduce a statutory “initial period of employment” (likely to be around 9 months), during which a lighter touch dismissal process may apply
• require employers to follow a fair but proportionate process if dismissing someone during this initial period, though the full burden of proof will not be as heavy as for longer serving staff

The law is shifting in favour of workers, but employers will still have some protection during probationary periods.

Why This Matters for Employers

For businesses, the main concern is increased litigation risk and reduced flexibility in the early stages of employment. But there are a few silver linings:

Probationary periods remain valuable

Employers can still use probationary periods to assess performance, behaviour, and fit. The lighter-touch rules should allow dismissals if things clearly aren’t working out.

One advantage might be that the majority of employers usually have a three-to-six-month probationary period written in their contracts. Increasing this to nine months will add an additional layer of protection, and it could provide an opportunity to introduce a goal and reward for outstanding employees by reducing the nine-month period to six months for great performance, making it a goal of any new recruit and wannabe CEO!!

Clearer, consistent standards

Introducing a statutory “initial period” may actually bring more certainty for employers. Rather than relying on tribunal judgments or long winded ACAS negotiations, there will be a framework to follow which reduces risk and ensures you keep proper written records instead of scribbled notes.

Better hires, fewer surprises

Knowing that dismissals can be scrutinised from day one encourages managers to be more deliberate in recruitment and performance management, which will potentially reduce bad hires.

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Focus on process, not avoidance

Instead of trying to “time out” employees until the two-year mark, employers can concentrate on running fair processes and giving proper feedback. This may reduce disputes in the long run.

Practical Steps Employers Can Take:

• review contracts and probation clauses
• clearly set out probationary periods, objectives, and review points
• include extension options where appropriate
• update dismissal procedures
• create a proportionate “probation dismissal” process that meets the lighter-touch requirements
• train managers to follow it consistently
• Improve recruitment and onboarding
• invest in a better selection process to ensure a better candidate fit
• use probation reviews to document progress and any concerns
• keep proper records

Even during probation, maintain notes of meetings, training provided, feedback given, and reasons for dismissal (if necessary) and your documented communication remains your best defence in tribunal claims.

Keep an eye out for future consultations

The exact rules for the “initial period” are still being shaped through consultation, but it takes time to get everyone onboard, trained in new and updated policy and processes, and to getting ahead means your robust recruitment and promotion process is sewn into the fabric of your business well before the deadline.

Balancing risk and opportunity

The removal of the two year threshold will mean more employees can bring claims, and employers will need to tighten up procedures. But the inclusion of an “initial period” suggests the government recognises the need for balance.

Handled well, these changes could actually help employers by:

• reducing uncertainty about what’s expected
• encouraging consistent people management practices
• building stronger employee relations from the start

The challenge is to get ahead of the reforms now by reviewing contracts, training managers, and embedding fair processes, rather than waiting until the Bill becomes law.

Employers who prepare early will be in the best position to manage risk while maintaining flexibility. Those who don’t may find themselves facing unnecessary claims and costs once the new rules take effect.

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