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The new Labour government has reaffirmed its commitment to making significant changes to employment law, with an Employment Bill expected in the first 100 days of the new Parliament. One of the most impactful changes for employers will be the proposal that the right to claim unfair dismissal will become a day one right.
While we don’t yet know exactly how this commitment will be achieved, we have set out below our views on some of the key questions clients are asking us about this forthcoming change.
Could the current qualifying period of two years for unfair dismissal claims be abolished very quickly?
The short answer to this question is yes. The relevant minister of state has the power to make an Order abolishing the unfair dismissal qualifying period, and this could be done almost instantly. However, in reality, it is considered very unlikely that the government would proceed in this way. It’s much more likely that there will be a consultation process with stakeholders such as employers’ organisations and trade unions before the change takes effect.
If I start someone now, can I be confident that they will have to work for me for two years before they have unfair dismissal rights?
No, you could not be confident about that. It’s possible that the abolition of the qualification period could be given effect in such a way that it only applies to people starting a job after the date the law comes into force, but there’s no reason to believe this is what the government has in mind. Therefore, it’s perfectly possible that people who have not yet accrued two years’ service will acquire the right not to be unfairly dismissed as soon as the law is changed.
Labour have said that it will still be possible for employers to use probationary periods to dismiss employees who are not working out. How will this work in practice?
The government has not provided any detail on this point at present. One option would simply be to provide that a dismissal during a probationary period will be fair, but doing that would effectively maintain a qualifying period by the back door, and seems contrary to the manifesto commitment. Also, not all probationary periods are the same length, so some sort of limit on the length of a probationary period would seem necessary to make the law work.
Another option would be to ask ACAS to introduce a Code of Practice on dismissals during a probationary period, and to provide that dismissals where the Code has been followed would be fair. The Code would likely take some time to develop and pursuing this route would probably mean that the abolition of the qualifying period would not come into force very quickly.
When the law comes into force, is there any basis on which I can take on a worker where they won’t get unfair dismissal rights?
We anticipate that some employers will explore the option of engaging workers on a self-employed basis, if they consider that the risks of hiring people with full employment rights from day one is too great.
However, the government also plans to give unfair dismissal rights to “workers”, who don’t currently enjoy these rights. Therefore, people who work in the gig economy and people who are currently classed as contractors but must perform the work personally (such as CIS cardholders in the construction industry) may end up with unfair dismissal rights if and when the government abolishes the distinction between “workers” and “employees”, giving both groups full employment rights.
What can I do to prepare for the change to the law?
Given that it seems likely there will be some basis on which employers can dismiss fairly if an employee proves unsatisfactory during a probationary period, it’s important to ensure you have systems in place to assess an employee’s suitability quickly during probation. This may involve training managers on diarising and carrying out probationary reviews and assessments, putting in place systems to document an employee’s progress during the early weeks of their employment and ensuring that the organisation communicates to new starts clear standards of performance and conduct which are expected during the probationary period.
Employers may also wish to review their recruitment processes to ensure, as far as possible, that suitability for a role is assessed as rigorously as possible at the hiring stage.
Alphr will be pleased to assist all of our clients in managing what will be a significant change to the rights of workers with short service. Planning for the changes in advance is strongly recommended and we will update clients when fuller details and likely timescales for these changes are known.
If you would like any further information on this article or would like to discuss your employment law and HR matters, please don’t hesitate to contact at hello@alphr.uk and we will be delighted to help you.
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