How can employers prepare for a day-one unfair dismissal right?

One of the headline employment law changes being introduced by the Labour Government is to provide employees with a day-one unfair dismissal right.

The current two-year qualifying period will be scrapped in place of a more stringent requirement on employers in dismissing staff. The question is always about balance: the balance between retaining flexibility in the labour market against providing adequate protection to employees.

In this article, employment lawyer Sungjin Park considers the three most likely options the Government will take in introducing this new protection.

1. Establish a fair reason from day one

The most draconian option is to simply remove the qualifying period. What this means in practice is that employers contemplating dismissal must establish a potentially fair reason from the first day of work. If introduced, this would place such a high burden on employers that it would fundamentally change the structure and flexibility of the labour market. This is considered to be the least likely approach.

2. Allow probationary dismissal

Rather than remove the current qualifying period, the Government may consider changing the qualifying period to coincide with the end of the probationary period. The most commonly used probationary period is six months. In practice, this would be tantamount to changing the qualifying period to six months, for example, in comparison with the current two-year period.

This would still represent a big shift from the current position, albeit not as radical as the first option above. It would mean that employers will have to pay extra attention to employees’ performance during probationary period and take prompt action if considering dismissal.

3. ‘Failing probationary period’ as a fair reason

This would be a ‘hybrid’ approach. Failing a probationary period would be added to the Employment Rights Act 1996 and which must be established by the employer but with a ‘stripped-down’ procedure for dismissal during the probationary period. As a potentially fair reason, this may be considered a “happy medium” between the first two options.

There is no question that one or a combination of the above changes will mark the biggest change to employment law in a generation. Employers should begin reviewing policies and practices now to ensure they are prepared for the proposed changes being implemented.

If you have concerns about any of the upcoming changes, or about employment law more generally, please contact Sungjin Park.