Unfair Dismissal Under The Employment Rights Bill

The Employment Rights Bill marks one of the most significant recalibrations of workplace law in recent memory. Among its many provisions, the proposal to grant unfair dismissal protection from the first day of employment stands out as both symbolically and practically transformative. For employers, it promises to alter the rhythm of hiring and management decisions, and will redefine what fairness means in the very early stages of employment.

The idea behind the reform is simple enough. Under the Bill's current form, once the measure takes effect, employees will no longer need to complete two years of continuous service to gain the right to claim unfair dismissal. The Government's intention is to provide greater security for workers and a more even standard of fairness across the employment relationship. Yet beneath that simplicity lies a complex cultural and operational shift that will call for foresight, not just compliance.

The end of the two-year safety net

For decades, the two-year qualifying period has shaped the way businesses manage new starters. It has given employers confidence to act quickly where a new recruit is not performing or fitting in, often without the same procedural rigour demanded in longer-serving cases. In many organisations, that service threshold has quietly influenced everything from how probation reviews are conducted to how line managers document issues.

Once the Bill comes into force, this long-standing cushion will be removed. Although the House of Lords has been resisting the proposal to make unfair dismissal a 'day one' right and have suggested that a 6-month qualifying period should be substituted. Assuming that unfair dismissal does become a day one right, this means that every employee, from their first day, will be able to challenge a dismissal on grounds of fairness. While that does not mean dismissals will suddenly be unlawful or that poor performance must be tolerated indefinitely, it does mean employers will need to justify their decisions more carefully, even in those early months when instinct and speed often drive HR decisions.

From a practical perspective, the fundamentals of fairness will need to apply from the outset. That will mean having a legitimate reason for dismissal, following a proportionate process, and ensuring that the decision is reasonable in all the circumstances. What the new framework will do is make these principles immediate rather than gradual.

The "initial period"

To balance employee protection with business flexibility, the Bill introduces an "initial period", which is effectively a statutory probation window during which a lighter-touch regime may apply. The Government has indicated that this period could last several months, possibly up to nine, though no duration is fixed in the legislation.During this early stage, the Bill gives Ministers scope to adjust how the unfair dismissal rules operate, allowing for a more streamlined approach to assessing suitability while still preserving the underlying expectation of fairness. However, the finer detail, including the length of the period and what streamlined fairness looks like in practice, will be set out in regulations after consultation.

This early stage is expected to retain some flexibility for employers where the employment relationship proves unworkable. But until those regulations are published, employers should assume that core principles of reasonableness and evidence will continue to matter. Dismissals during probation should therefore be recorded, explained, and handled with care.

For HR professionals, this developing framework is a reminder to keep short-service dismissals well documented. Even if the procedural burden is eventually eased for very new staff, tribunals are still likely to expect clarity of reasoning and consistent application of policy.

Reconsidering probation and performance management

Probationary periods have long been viewed as a period of reduced risk. Under the new system, however, that assumption will no longer hold. Probation will still serve a practical purpose as a structured way to assess suitability, but it won't shield an employer from scrutiny. What will matter is that the process during probation is transparent, consistent and properly recorded.

Employers may need to rethink how managers are trained to handle any performance issues in those first few months though, as a conversation that once might have been informal and undocumented could now form part of the evidence base if a claim arises. HR teams should consider building stronger induction, feedback and review processes to ensure concerns are identified and addressed at an early stage.

At the same time, the reform offers an opportunity to strengthen workplace culture. If probationary management becomes more deliberate, with clearer expectations, constructive feedback and open communication, the result could be greater engagement and reduced turnover. In that sense, the Bill encourages a shift from reactive HR practice to proactive, people-centred management.

Legal and operational implications

The immediate legal effect of day-one protection is the likelihood of more claims reaching tribunals. Even a modest increase could strain capacity and lengthen case timelines. For employers, this underlines the need to handle early-stage dismissals carefully – not only to manage legal risk, but to avoid the time and cost of defending avoidable claims.

Good record-keeping will become the quiet cornerstone of defence. Notes of meetings, feedback sessions, warnings and decisions will play a more decisive role in demonstrating fairness. The "word-against-word" situations that often dominate short-service disputes will be harder to resolve in an employer's favour if the evidence base is weak.

Beyond documentation, employers should review HR policies and staff handbooks to ensure they reflect the upcoming reforms. Templates for probation reviews and dismissal letters will require refreshing, and disciplinary and capability procedures may need to allow for proportionate steps even in early employment. Internal appeal processes should also be able to accommodate employees regardless of service length.

Redundancy and restructuring decisions will require similar attention. Once the two-year threshold is removed, all employees, however recently hired, will fall within the scope of fair selection and consultation processes. Employers that have historically focused consultation on long-serving staff will need to adjust accordingly, though the exact rules may depend on the final shape of the regulations.

A cultural shift in the workplace

Perhaps the most significant aspect of the reform is its cultural signal. Extending unfair dismissal rights to day-one reframes the employment relationship as a partnership built on mutual respect and procedural integrity from the start. For many employers, that principle is already embedded in good practice; what changes is the legal weight behind it.

The reform will inevitably reveal contrasts in organisational culture. In workplaces where communication, trust and accountability are already valued, the transition may be smooth. In others, however, it may highlight weaknesses in how decisions are made or explained.

The Bill also marks a broader shift in mindset. Fairness will no longer be something an employer "grants" after a period of service; it becomes a shared expectation from day-one.

Though some employer groups have raised concerns that day-one protection could make businesses more cautious about hiring, particularly smaller organisations, the Government maintains that a defined initial period should help mitigate those effects. It expects that such reforms may encourage earlier dialogue about 'teething' problems, whilst presenting employers an opportunity to strengthen engagement and reputation through transparent, fair management.

Adapting rather than resisting

Some employers may initially see the reform as an additional layer of red tape. In practice, it is better viewed as an opportunity to modernise internal systems and align them with contemporary expectations of employment. The changes mirror a wider policy trend towards openness, procedural clarity and equality of treatment across all service levels.

Forward-looking organisations will treat the Bill as a framework for improvement rather than a compliance hurdle. That might mean revisiting recruitment practices, ensuring that selection criteria are objective and transparent, or developing early feedback mechanisms to catch issues before they escalate. It may also mean investing in management training to better help leaders to hold difficult conversations constructively and with proper documentation, as in the new landscape, the manner in which a dismissal is handled will carry even greater weight.

Looking ahead

As the Employment Rights Bill nears the final stages of its passage through Parliament, one live point continues to be the House of Lords' preference for a shorter qualifying period of six months rather than full day-one protection. The Government has pointedly rejected that approach, and for now, the Bill is proceeding on the basis of its original policy direction.

For employers, though the message right now is less about the parliamentary back-and-forth and more about preparing for reform. Those who take the time now to embed consistency, clarity and documented decision-making into early employment practices will be well positioned when or if the new framework is eventually introduced.

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