Making protection from unfair dismissal a day 1 right is one of the highest profile but less popular (amongst employers) changes to be made by the Employment Rights Bill ("the Bill"). Perhaps the first thing that employers need to know about it is that the UK Government has confirmed that the reforms will take effect no sooner than Autumn 2026, two years from now. Until then, the current regime will continue with employees needing two years' service (actually 103 weeks in most cases due to the operation of statutory notice period) to qualify. Consultation is scheduled to begin in 2025.
The proposed change
The UK Government describes this change as "making unfair dismissal protection a right from day 1 for all employees, while legislating to introduce fair and proportionate processes for dismissal in initial periods of employment". The processes referred to are intended to be less onerous than the procedures currently required in order for a fair dismissal. Employers will be interested to know just how much less onerous.
The paper published alongside the Bill "Next Steps to Make Work Pay" ("the Paper") indicates the UK Government suggest that, "as a starting point" the process should consist of holding a meeting with the employee to explain the concerns about performance, at which the employee could choose to be accompanied. Prior to publication of the Bill, it had been reported that a letter setting out the reason for the dismissal might be all that was required - that seems unlikely now. A meeting would seem more likely to discourage an unscrupulous employer from dismissing, for example, a discriminatory reason, but does the use of the phrase "as a starting point" anticipate additional further steps that all employers, good and bad, will need to take? Are employers going to have to give the employee any opportunity at all to improve? What happens if the employee responds to the request to attend a meeting by going of sick? If employers want to shape how this reform will work, they should ensure they take the opportunity to respond to the consultation when it opens.
Other aspects of the proposal that the UK Government will be seeking views on in the consultation relates to the length of the "initial period" of employment (a statutory probationary period) during which the less onerous procedure will apply. The Paper states that the UK Government's preference is nine months. Consultation is also to take place on what compensation should be available for successful claims arising from dismissal during the statutory probationary period.
What should employers be doing?
While the publication of the Bill, its explanatory notes and the accompanying paper have provided more food for thought, we are still a long way from knowing exactly what will be required from employers. At this point employers should be looking out for the launch of the relevant consultation - something we will highlight and provide a link to when it is published. It is essential that the new rules on dismissal during a statutory probation period are clear, straight forward, and easy to follow - all the more so for SMEs and small businesses who do not have a dedicated HR support.
Following consultation, the new rules will be set out in regulations. The UK Government has confirmed that there will be a "substantial period" of time thereafter for employers to prepare and adapt before the rules are brought into force. In due course, employers will need to act to ensure that their policies and procedures comply, and that those involved in making decisions on dismissals are properly trained on the new law.
