Are you ready? HR considerations if protection from unfair dismissal becomes day one right

Currently, an employee needs two years’ service to bring an ordinary unfair dismissal claim. However, in the run-up to the general election, Labour pledged to remove this service requirement so that employees would be protected from unfair dismissal from day one of employment. Let’s explore what this may mean for employers and what answers we still need from the new government.

What is proposed?

Under Labour plans, the qualifying service required for ordinary unfair dismissal claims – currently two years - will be removed so that employees have this right from the very start of their employment.

Labour said in their ‘Plan to Make Work Pay: delivering a new deal for working people’ that:

“This will not prevent fair dismissal, which includes dismissal for reasons of capability, conduct or redundancy, or probationary periods with fair and transparent rules and processes. We will ensure employers can operate probationary periods to assess new hires. However, the changes will help to ensure that newly hired workers are not fired without reason or cause and will help drive up standards in the workplaces.”

Labour said that removing the qualifying service requirement for ordinary unfair dismissal will give workers more security to change jobs. They said that this is needed because the rate at which people move jobs has been declining and that this poses a risk to productivity because businesses may not be able to hire the best possible candidate.

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What impact could this have on businesses?

If an employer cannot use a ‘short service’ clause to dismiss an employee with less than two years’ service, it appears that they will have to follow full processes. As a result, they may be under more pressure to hire the right person. Employers may be less inclined to take someone on to give them a chance and see how they perform because, if this change is introduced, there would be less flexibility to dismiss them if things don’t work out. Employers may need to review their recruitment processes, and some may want to make changes to ensure that they get it right from the start.

Labour has said that employers will still be able to operate probationary periods to assess new hires. It is not clear based on the information that we have to date whether it means that if an employee is dismissed during their probationary period, they will still not be able to bring an ordinary unfair dismissal claim. If it does, then we will also have to wait to see whether rules are set that limit the length of the probationary period, otherwise, a legal loophole could be created if an employer can set a probationary period of two years because that in effect would mirror the situation that we have now.

If the right to claim ordinary unfair dismissal does become a day one right, then all policies and procedures will need to be reviewed to make sure that they are compliant. Managers will also need training to make sure that they are fully aware of the correct processes to follow. This is particularly important because there could be an increase in the number of employment tribunal claims if more people have the right to bring ordinary unfair dismissal claims, so businesses will likely want to minimise this risk as much as possible.

When could this change come into effect?

The Government has said that they will be introducing a new Employment Rights Bill, and it is expected to be laid before Parliament for debate within 100 days of them entering government. It’s expected that the removal of the service requirement for ordinary unfair dismissal claims will be included in the draft Bill, but we will have to wait to know for definite.