Election 2024: Unfair Dismissal - A Day-One Employment Right?

This is a guest blog by REC business partner Chartergate Audit Services 

In this article Chartergate Audit Services  provides  analysis of Labour’s employment law proposals.   We consider the proposal to extend the right not to be unfairly dismissed to employees from day-one of their employment.  

Currently, aside from a few exceptions, an employee who is dismissed has the right to claim unfair dismissal in the employment tribunal, provided they have two years of qualifying service.  Once an employee has the two years’ service, dismissing them becomes more onerous, timely and costly.  The Employer must have a fair reason, follow a fair procedure and act reasonably in the circumstances of the dismissal. 

Labour’s proposal is to remove the qualifying period and provide employees with the right to claim unfair dismissal from day one of their employment.  The policy paper also states that the proposal will not prevent dismissal for fair reasons and references employers being able to use probationary periods to assess new hires.  With little more detail, we assess what this new day-one right might mean in practice: 

• Remove the qualifying period entirely.  This option would be expedient, require little drafting time and (searching for positives here) bring clarity to employers and employees alike.  In practice it would mean employers would require a fair reason for the dismissal, have to carry out a fair procedure when enacting the dismissal and act reasonably in the circumstances, from day one of an employee’s employment rather than after two years’ service. 

The consequences of this option would likely mean employers would be far more reticent when employing new staff and for those staff already in situ, dismissals would take more time and cost more. 

• Remove the qualifying period but allow dismissals without a process during the contractual probationary period.  This option would, in some form at least, allow employers to retain some flexibility when employing staff and recognise the very real fact that employers cannot be certain of an employee’s suitability from day one. 

From a legal perspective it would elevate the status of probationary periods from little more than a ‘getting to know you process’ with some basic increases in entitlements after successful completion, to a crucial element of the employment relationship, requiring careful consideration and drafting. 

• Remove the qualifying period but allow dismissals during the probationary period with an abbreviated dismissal process.  This option seeks to find some middle ground between the earlier two options and balance Labour’s commitments to both employees and employers.  It would provide employees with more security of tenure, while also allowing employers much needed flexibility in managing their workforce. 

Final Thoughts 

Should Labour enact this proposal it would mark a radical change to employment law, especially if they enacted a measure consistent with option 1 above.  It would require significant changes to how employers manage their workforce, potentially leading to employers looking at different engagement methods, for example, increasing their use of the temporary labour market.