Employment Rights Bill – Proposed New Unfair Dismissal Rights

Unfair Dismissal – Proposed Changes

Employees currently have no claim for “Ordinary” Unfair Dismissal if they have less than two years’ continuous service.

The Employment Rights Bill proposes to change this entitlement to a day-one right.

This will mean employees could make a claim for Unfair Dismissal from day one of their employment.

There are likely to be some exceptions to the new proposed rules, including if dismissal takes place during a ‘statutory probationary period’.

The government still needs to consult on what this will actually mean in practice.

At present, this period is likely to be a maximum of nine months.

It is likely that there will be a dismissal process during this period, which will be significantly reduced from the standard process so that the employee’s capabilities and suitability for the role can be assessed.

This will give employers and employees time to ensure that any training and support is offered to avoid any dismissal at the end of the probation period.

The government will also consult on a compensation scale in such cases.

It is thought that any compensation will be less than the compensation payable to employees who have passed probation.

Redundancy dismissals will be exempt from the probationary period exception.

This means that any redundancy process, regardless of length of service, will need to be followed fairly and in accordance with ACAS guidelines.

Other proposals have also been introduced during the parliamentary review process.

The time limit for an employee to bring a Tribunal Claim against an employer is proposed to be increased from 3 to 6 months.

Proposed legislation also changes the law on Whistleblowing, potentially making it easier for employees to successfully bring claims for automatic unfair dismissal on the grounds of whistleblowing.

How to Prepare For The Unfair Dismissal Changes

An employer can take two major steps to ensure that they can dismiss an underperforming employee if the Government goes ahead with the day one changes for Unfair Dismissal claims.

We outline the approaches below:

Recruitment Approach

It is easy for employers to settle for a sub-standard candidate rather than conduct a thorough search for the right candidate. However, this approach is flawed and will cost a lot more overall. The cost of recruitment is often hidden, but it is real in terms of management and training time wasted, under-productivity and workforce upheaval. Here are some steps you can take to improve this process in your organisation:

• Look for attitude before skills; You can teach anyone most things with the right attitude. Someone who is highly skilled with the wrong attitude will likely learn nothing and add little positivity to your team.
• Test the candidates at final interview stage; make sure they can work under pressure and have the basic English and Maths skills.
• Consider a “test before you sign” day; the candidate needs to be comfortable with the working surroundings and the employer needs to know the employee is motivated to work at the Company.
• Use a scoring matrix to score all candidates in the Final Interview stage. This will give you an objective view of how each candidate behaved and reacted to questions and tests.
• Remember: you need to surround yourself with the best people you can find and afford.

Probation Management

This is the second opportunity to ensure that you have checked that the new employees are fit to work at your company. If you miss this opportunity in future, you will be left with employees that are sub-optimal for your organisation.

• Diarise at least a mid-term and final probation review dates
• Make sure that the employee has had a proper induction and has been through their contract of employment, handbook, policies, procedures and health and safety
• Consider if it would be a good idea to appoint a mentor for a few weeks to help the employee settle in
• Check in regularly to ensure that the employee feels comfortable and to resolve any questions or concerns
• Provide any training that the employee needs to pass the probation. Make sure this is completed well in advance of the probation end date
• If you are unsure about the employee’s abilities and it is not due to a lack of training, bring the probation to a close or extend the probation period. This is unlikely to improve if you pass the probation.

Given that these changes are not likely to be introduced until Autumn 2026, companies and organisations have an opportunity to review and alter their approach to recruitment and probationary processes, allowing time to iron out any issues and provide training.

HR Smart’s Summary

These new changes to legislation present a new set of challenges to any employers’ ability to dismiss an employee once they have started their employment with the company.

By taking proactive steps during 2025, employers can ensure that they are fully prepared to manage employees effectively and make sure that they do not fall foul of the new legislation.

Should you need to contact us for any help or advice in this matter, please email jon@hrsmartuk.com or contact us on 01903 754107.