Probation Periods – what can employers do to prepare for Day 1 unfair dismissal rights?

Under the Employment Rights Bill (ERB), it is expected that employees will be given the right to bring an ordinary unfair dismissal claim from their first day of employment. At present, employees need two years’ continuous service to bring an ordinary unfair dismissal claim. This requirement shall be repealed under the ERB. 

This article explores what employers can do to prepare for this change and what we know about the proposed introduction of a statutory probation period so far.

When will unfair dismissal become a Day 1 right? 

It is expected that unfair dismissal will become a Day 1 right for employees no sooner than autumn 2026. 

Will employers be able to dismiss during probation?

The ERB will introduce the concept of an "initial period of employment" (also known as a statutory probation period). The length of this period will be outlined in regulations, but it is expected that it will be nine months.

During the statutory probation period, the Government has outlined that a “lighter touch” dismissal procedure shall apply to dismissals based on capability, conduct, statutory restriction, or some other substantial reason relating to the employee. Dismissals for redundancy reasons shall be excluded, which means that employers will need to continue to follow a fair redundancy process for these dismissals and that the “lighter tough” dismissal procedure shall not apply. 

The “light touch” dismissal procedure shall be subject to consultation. The Government has suggested that the process should include holding a meeting with an employee to explain performance concerns. 

The Government has stated that employers will still be able to run a separate contractual probation period. This will need to be compliant with the new “light touch” dismissal procedure.

NB: the above changes shall not impact automatic unfair dismissals (for example, a dismissal for whistleblowing reasons). Employees will still be able to claim this before their first day of work. 

What should employers do now?

We are awaiting further detail from the Government on how the statutory probation period will operate in practice. Nevertheless, it would be sensible for employers to start thinking about how they currently use probationary periods and what they can do in preparation for unfair dismissal becoming a Day 1 right. We have outlined some points employers should consider ahead of the incoming changes:

• Does your organisation currently use probation periods? If so, what roles are they used for?
• Check what your organisation’s contracts of employment say about probation periods. Are these clauses compliant with the Employment Rights Act 1996? Do these clauses need to be updated for new starters? How is the probation period addressed in offer letters? 
• Consider the terms of any probation period. What is the length of the probation period? Is there a contractual right to extend? What is the notice entitlement during the probation period?
• How do probation periods interact with other policies, such as disciplinary and capability?
• Does your organisation have a probation period policy or procedure in place? How does this work in practice and are any changes needed to make the policy or procedure more effective?
• Do line managers need training on how to manage probation periods?
• Explore why your organisation has dismissed employees in their probation periods. Are there any lessons to be learnt, for example, does the recruitment process need to be more robust, or are any changes needed to job descriptions, so it is easier to point out underperformance?