Last week the Government stepped back from their original proposal under the Employment Rights Bill (“ERB”) to implement day 1 unfair dismissal rights for employees, and instead introduced a six-month qualifying period for unfair dismissal.
The original roadmap published alongside the ERB suggested that the new qualifying period would be introduced in early 2027, but it is now likely that the Government will be fast tracking the new law so that it will take effect from early 2026.
The House of Lords had pushed back on the day-1 rights pledge and insisted that a 9 month statutory probation period would need to be utilised as an alternative buffer for the enhanced rights. Having consulted with Trade Unions on the point, the Government has compromised on one of its major manifesto pledges by sacrificing the day-one right to unfair dismissal protection and instead will be reducing the qualifying period for unfair dismissal from 2 years to 6 months.
The new law will be a reduction of the current system rather than the introduction of a new system. As a result, the change has been fast-tracked to a far earlier implementation date believed to be early 2026 and without further consultation on the point.
This will mean that employers will have to dismiss for a fair reason and only after having followed a fair process for those employees who have 6 months or more continuous employment.
Probationary periods regularly last for at least six-months (and sometimes longer), so employers are encouraged to consider a thorough assessment of an individual’s suitability for their role sooner, rather than later, in the early stages of employment and certainly before the expiry of 6 months. Indeed, if the new legislation follows the course of the current law, employers will need to be thinking about any dismissal by month 5, due to the fact that employees are entitled to one week (7 days) minimum notice – so the entitlement to unfair dismissal may actually arise at “6 months less 1 calendar week” and not 6 months.
The accelerated timeline has been agreed upon because employers will (according to the government) not need to familiarise themselves with a new process. However, it is important not to downplay the significance of this move. For employers to effectively prepare for the broadened protections, we would advise that contracts of employment and policies are reviewed and key decision makers trained to understand the new rights . That said employers should not forget the fact that there are already forty-two existing day one legislative rights that employees may be entitled to rely upon most of which arise in relation to protection against discrimination or whistleblowing.
Matthew Potter, Partner, comments:
Even though this is no longer a day one right, the introduction in early 2026 of the 6 month qualifying period for unfair dismissal will nonetheless mean that as employers you will need to review your contracts and processes to account for the changes. This will require a change in established approaches to new staff members and the way that the working relationship is managed. It might not be the low-maintenance amendment that the Government has currently pitched it to be.
If you have any questions on any of the upcoming changes, please contact a member of the team here.
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