Under the current UK employment law, employers are not legally required to follow a full and fair dismissal process for employees with less than two years of continuous service. This means that employees who have not yet reached this threshold can be dismissed without the employer needing to provide a fair reason or follow a formal procedure, except in cases of automatically unfair dismissal or discrimination.
Automatically unfair dismissals
Despite the general rule, there are exceptions where dismissals are considered automatically unfair regardless of the employee's length of service. These include dismissals related to pregnancy, family leave, whistleblowing, and asserting statutory rights, among others.
Proposed changes under Labour’s proposals
Day one protection against unfair dismissal
Labour’s proposed changes aim to extend unfair dismissal protection to employees from their first day of employment. This significant shift means that new starters will be protected from unfair dismissal immediately, eliminating the current two-year qualifying period.
Impact on employers
The introduction of day one rights for unfair dismissal is expected to have several implications for employers:
Increased need for fair processes: Employers will need to ensure that they follow fair and transparent processes for all dismissals, including those of new employees. This includes having valid reasons for dismissal and following a fair procedure.
Potential rise in tribunal claims: With more employees being able to claim unfair dismissal from day one, there may be an increase in the number of claims brought before employment tribunals. This could lead to higher legal costs and the need for more robust HR practices.
Practical steps for employers
Reviewing and updating policies
Employers should take proactive steps to review and update their existing disciplinary, capability, and redundancy policies to ensure they are compliant with the new requirements. This includes:
Updating employment contracts: Ensure that contracts for new hires include clear probationary periods and the conditions under which employment may be terminated. Tailor the probationary period to fit the job role and seniority level, ensuring enough time to assess performance and confirm employment.
Training line managers: Provide training for line managers and HR teams on the new legal requirements and the importance of following fair procedures from day one.
Implementing fair dismissal procedures
To mitigate the risk of unfair dismissal claims, employers should:
Conduct thorough investigations: Before making any dismissal decisions, conduct thorough investigations to establish the facts and ensure there is a fair reason for dismissal.
Follow the ACAS Code of Practice: Adhere to the ACAS Code of Practice on Disciplinary and Grievance Procedures, which outlines the steps for handling dismissals fairly.
Document everything: Keep detailed records of all discussions, investigations, and decisions related to dismissals to provide evidence of a fair process if challenged.
Additional considerations
Probationary periods
While the proposed changes do not prohibit the use of probationary periods, employers will need to manage these periods effectively. This includes setting clear performance expectations, providing regular feedback, and documenting any performance issues that arise during the probationary period. Include a clause in contracts that allows employers to extend the probationary period under specific conditions, like extended sick leave or unmet goals. This gives employers more flexibility to assess performance and potentially terminate employment on shorter notice if needed.
Settlement agreements
Given the potential increase in unfair dismissal claims, employers may find it beneficial to reach early settlements with employees where appropriate. Settlement agreements can provide a mutually agreeable resolution and avoid the costs and uncertainties of tribunal proceedings.
Monitoring legislative developments
Employers should stay informed about the progress of Labour’s proposals and any legislative changes. Engaging with legal advisors can help ensure that policies and practices remain compliant with the latest legal requirements.
Further reading
This article was generated using HR Advisor, an AI tool designed to assist HR professionals with employment law. If you find the content helpful, please explore HR Advisor and sign up for a free trial to see how it can benefit your HR practices.
