Further to our recent articles on the Employment Bill and its progress through the parliamentary system, we thought it would be helpful to provide a deeper dive on the main changes so as employers know what to expect when the Bill comes in to force.

With this aim in mind, we are starting with the introduction of day one unfair dismissal right and statutory probationary periods.
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What is the current position?

At present an employee can only bring a claim for ordinary unfair dismissal if they have at least two years of continuous employment (the “Qualifying Period”) at the date their employment ends.

Although it is already recommended that employers include a probationary period within their contracts of employment there is no requirement for employers to do so. Further, the inclusion of such contractual probationary periods does not restrict an employer’s ability to dismiss an employee within the longer Qualifying Period (less one week) without the risk of an employment tribunal claim for ordinary unfair dismissal being issued against it.

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What will change under the Employment Rights Bill?

The Bill will remove the Qualifying Period before employees can bring claims for ordinary unfair dismissal, the right to issue a claim for unfair dismissal will therefore become a day one right for all employees.

This change will drastically change the risks attached to employing new staff for all employers. However, the one (somewhat limited) bright spot, is the intention to introduce a new statutory probationary period or as the Government calls it an “Initial Period of Employment”. The purpose of the statutory probationary period is to provide employers with a limited ability to dismissal unsuitable employees during their initial period of employment.

We expect the initial period to be 6 months with the option to extend it to 9 months in circumstances where a concern regarding an employees suitability for continued employment has arisen during that first 6 months. 

During this statutory probationary period, it will be easier for employers to defeat claims for unfair dismissal, where those claims relate to misconduct or poor performance by the employee, provided they can demonstrate that a fair process was adopted to end the employment in this respect. We expect that process to take the following form:

• Provide the employee with a written invitation to attend a probationary review meeting providing the evidence of poor performance and/or misconduct to be discussed at the meeting and confirming the employees right to be accompanied at the meeting by a work colleague or trade union representative;
• Hold the probationary review meeting, during which the employers concerns will be discussed and the employee will have the opportunity to respond to the concerns raised;
• Provide a letter to the employee confirming the outcome of the meeting and where a decision to dismiss has been taken setting out the reasons for that decision. This letter will also confirm any final payments to be made to the employee.

It should be noted that the adoption of the statutory probationary procedure will not provide a defence for claims of unfair dismissal resulting from redundancy. This will mean that any employee whose employment is terminated by reason of redundancy will be able to claim unfair dismissal regardless of their length of service.

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Implications of this change

Without doubt the implementation of these changes will increase the number of employment claims employers face from their staff. 

The change also comes at a time when the Employment Tribunal is already struggling and so employers will likely see further delays between tribunal claims being issued and hearings taking place.

The changes proposed in respect of the Qualifying Periods applicable to claims for ordinary unfair dismissal, will not impact on an employee’s right to issue claims for discrimination or whistleblowing as these rights have always applied from day one.

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How should employers prepare for this change?

Although the Employment Bill is expected to be implemented later this year, the changes intended to repeal of Qualifying Periods and introduction of a statutory trial period are not expected to take effect until October 2026.

Employers should act now to review their probationary review procedures; they must ensure that their existing procedures are fit for purpose and that managers are confident in leading such procedures. Now is therefore time to consider introducing training for managers on the requirement of such procedures and the importance of adopting a fair process.

Given this change will see the removal of the two-year ‘safety net’ for making dismissals that currently exists, employers should also take the opportunity to review the performance of those employees who will have less than two years’ service before the implementation of this change to ensure their suitability for permanent employment. In so doing employers will be in a position to dismiss underperforming employees they would otherwise receive additional unfair dismissal rights under the Bill in October 2026.

Employers should also consider their existing recruitment exercises to ensure they are as rigorous as possible to ensure individuals being taken on are the right person for the role.

FMGS are available to assist employers seeking to review their contracts of employment and handbooks in advance of the introduction of the Employment Bill. We can also provide training to management teams on the implications of the changes.