Unfair Dismissal – “Day One” Right

On 19 September, it was reported by the Financial Times that, in connection with Labour’s proposal for “day one” unfair dismissal rights, employers will be able to put new employees on a probationary period of 6 months.

What could it mean in practice?

Currently, employees must have at least two years' continuous employment on the date of termination to bring an ordinary unfair dismissal claim. The report from the Financial Times is not unexpected given the fact that Labour has always referenced unfair dismissal when addressing day one rights. One option available to the government is to simply remove the qualifying requirement from the legislation, meaning that employees would be able to lodge unfair dismissal claims from day one. However, Labour has also stated that it would be possible for employers to fairly dismiss new hires during a probationary period "with fair and transparent rules and processes", suggesting that there will be some sort of mechanism for fair dismissals to take place.  

We do not know what “fair and transparent rules and processes” will look like and how they we be applied in practice, there are many unanswered questions.

Unanswered questions

1.  The government are unlikely to introduce a 6 month qualifying period as this would contradict the promises made in the manifesto, but will there be certain grounds for dismissal within the first 6 months? If those grounds are fulfilled and prescribed processes followed, will the employer have a statutory defence?

2.  Will the process be shorter than the process set out in the Acas Code of Practice on disciplinary and grievance procedures?

3.  If there is a breach of process, what will compensation look like and will there be a statutory cap?

4.  Will employers be required to amend their contracts to include a 6 month probationary period, or will it be a statutory period?

5.  Will there be any option to extend if the employee is not performing?

6.  Will it only apply once the legislation comes into force?

Key takeaways

• Employers need to look at their contracts of employment and probationary period provisions.
• Employers should start thinking about how their probation processes can be tightened up (for example, additional review meetings, mentoring as standard practice and early intervention for poor performers).
• Most importantly, employers need to take a close look at their recruitment procedures so that correct decisions are made at the outset. Employers need to think about whether they need to increase the number of interviews, include aptitude tests, query employment gaps and always ensure references are followed up.

If you or your business require any assistance to help prepare for this change, please contact a member of the Employment, Pensions & Immigration department.