Day One Right for Unfair Dismissal

Probably the most eye- catching provision of the new Employment Rights Bill 2024 (the Bill) currently before Parliament is the right of an employee to claim unfair dismissal from day 1 of their employment. The current qualifying period is 2 years therefore the new proposal represents a radical change.

Alec Colson

Head of Employment Law

Taylor Walton

The Bill introduces a new concept of an initial period of employment which allows the Secretary of State by way of regulatory powers to provide a different standard of fairness during this initial period. In other words, it will allow for there to be a statutory probationary period for an employer to determine the suitability of their newly recruited employee during this period. The Government preference is for the initial period to be 9 months as stated in its document Next Steps to Make Work Pay which was published at the same time as the Bill. However, the initial period is still subject to consultation and may change.

During the initial period, the employee will still be able to claim unfair dismissal and the employer will have to provide a fair reason for dismissal on the grounds of conduct, capability, that it would be unlawful to continue to employ the employee (for example, the employee is not entitled to work in the UK) or some other substantial reason related to the employee.

Dismissal on the grounds of redundancy is not included as it does not relate to the individual employee. Therefore, if the employer wishes to make an employee redundant after day 1 due to a drop in business demand, the employer would still have to go through a consultation process with the employee and meet the current requirement to show that it is a fair dismissal.

Therefore, what hoops will the employer be required to jump through during the initial statutory probationary period to ensure it is a fair dismissal? This is where it gets interesting.

In the Next Steps document, it states that the Bill allows employers to operate probationary periods by providing an initial period during which there will be a lighter-touch process for employers to follow to dismiss an employee who is not right for the job.

The question is what does lighter- touch and not right for the job mean. Although there will be further guidance forthcoming on what will be reasonable grounds to dismiss during the probationary period, there will inevitably be disputes as to whether or not an employee’s performance was sufficiently poor enough to justify dismissal during the probationary period.

Next Steps also states that the Government is inclined to suggest that a fair procedure should consist of holding a meeting with the employee to explain the concerns about their performance (at which the employee could choose to be accompanied by a trade union representative or a colleague).

The Government will consult extensively, including on how it interacts with Acas’ Code of Practice on Disciplinary and Grievance procedures.

Again this will be area where the employee will be able to challenge an employer as to whether a fair procedure was followed during the probationary period.

On the basis of the information we have to date, it appears that there will be 2 types of ordinary unfair dismissals – dismissals which are unfair during the probationary period and those after the initial 9 months of employment. This will inevitably lead to the development of new case law in this area which employers will need to be aware of before they dismiss at the end of the probationary period.

The Government has indicated the day 1 right will not come into effect until Autumn 2026 so employers will have time to get their ducks in a row. Newly recruited employees will need to know the performance requirements of their new role and be informed during the probationary period whether they are meeting those requirements. If they do fail their probationary period, the employer will then have evidence to demonstrate that the employee was not right for the job.

• Alec Colson is a solicitor and Head of Employment Law at Taylor Walton. He can be contacted on 01582 390470 or via email – alec.colson@taylorwalton.co.uk.

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