The Employment Rights Bill, introduced to Parliament on Thursday 10th October 2024, is the government’s first phase of achieving the Plan to Make Work Pay.
It has published a set of factsheets to help people understand the measures within the bill. So, what does it say about its plans to provide day-one protection from unfair dismissal?
What is the current policy/legal framework?
Employees must have worked for their employer for at least two years before qualifying for the right to claim ‘ordinary’ unfair dismissal at a tribunal.
This does not apply to most of the ‘automatically unfair’ reasons for dismissal (such as pregnancy, whistleblowing, or trade union membership).
It also does not apply to dismissals owing to an employee’s political beliefs or affiliation, or their membership of a reserve force.
Probation periods are contractual, not statutory, and are often unique to a specific employer’s employment terms and conditions. Employers use these periods to ensure the compatibility of a new employee with their role. Probation may also be tied to an employee’s access to perks such as a staff discount, access to a pension scheme and job security, as an employee’s notice period is usually lengthened after passing probation.
Policy intent
Extending employee protections against unfair dismissal to day one of employment will strengthen employment rights and end one-sided flexibility in the workplace, increasing job security for employees in England, Scotland and Wales.
The government recognises the importance of ensuring that a job is a good fit for the employee and the employer by establishing a ‘statutory probationary period’. This will ensure that businesses retain the confidence to hire employees.
These changes will help ensure that newly hired workers are not fired arbitrarily and will drive up workplace standards.
How will it work?
The government is repealing the two-year qualifying period for employee protections against unfair dismissal, ensuring that every employee is protected from day one of starting work. Existing rights that are already protected without any qualifying period will not be affected.
These changes will not prevent an employer fairly dismissing an employee. The government is committed to ensuring businesses can operate probationary periods fairly and transparently. It will establish a ‘statutory probationary period’ to ensure that employers retain the ability to ensure that the job is a good fit for both the employee and the employer. The government proposes that this period should last for the initial nine months of employment. During this period, a lighter touch and less onerous process for businesses to fairly dismiss someone who is not right for the job will apply.
The government will consult on:
- The length of the statutory probation period.
- How the ‘lighter touch’ dismissal process will operate.
- The unfair dismissal compensatory award regime for dismissals during that period.
Reforms of unfair dismissal will take effect no sooner than autumn 2026.
Employers will retain the ability to run separate contractual probation periods of any length they choose and to choose what non-statutory entitlements the employee can access during that period.
Employers will still be able to fairly dismiss people beyond the nine month period, but this will be governed by existing provisions on dismissal rather than by the lighter-touch regime. Setting clear performance expectations at the outset of an employee’s job will ensure they understand the required standards.
Key statistics
Around nine million employees have been working for their employer for less than two years, so they have only minimal protection against unfair dismissal.
According to the Office for National Statistics Business Insights and Conditions Survey data:
- 70% of businesses have a probation policy (excluding microbusinesses with 0-10 employees).
- 22% of microbusinesses operate a probation policy.
- 97% of businesses that have a probation policy operate probation periods of six months or shorter.
Source: Unfair dismissal
