Probationary periods and the Employment Rights Bill: What employers need to know

The UK employment landscape is poised for a significant shift with the proposed Employment Rights Bill (ERB), which aims to extend protection against unfair dismissal to all employees from day one of employment. This change will have a direct impact on how organisations manage probationary periods and early-stage employment relationships.

Under current legislation, employees typically need two years of continuous service to qualify for protection against ordinary unfair dismissal. This means that during a standard probationary period (usually 3–6 months), most employees cannot challenge a dismissal on procedural grounds.

However, day one rights already exist for dismissals deemed automatically unfair — such as those related to pregnancy, whistleblowing, trade union membership, or discrimination. These claims do not require any minimum service period and are often used by employees with less than two years’ service to bring tribunal claims.

The ERB introduces several key changes:

1. Day one protection for unfair dismissal

The Bill proposes to repeal the two-year qualifying period, meaning all employees could be protected from unfair dismissal from the moment they start work.

2. Statutory probation period

A new “initial period of employment” — referred to as a statutory probation period — will be introduced. The Government’s preferred duration is nine months, although this will be subject to consultation.

Employers can still maintain contractual probation periods of any length and link non-statutory entitlements to them. 

3. Modified dismissal procedure

• During the statutory probation period, a lighter-touch dismissal process will apply for dismissals based on:
• Capability
• Conduct
• Statutory restriction
• Some other substantial reason (SOSR) relating to the employee

This process may involve a meeting to explain concerns, with the employee having the right to be accompanied. However, redundancy dismissals are excluded from this modified procedure and must follow standard protocols.

4. Written statement of reasons

The two-year qualifying period for receiving a written statement of dismissal reasons will be removed. Employees will be entitled to this after the statutory probation period, with exceptions for those dismissed during pregnancy or statutory leave.

5. Compensation cap

A lower cap on compensatory awards may apply to dismissals under the modified procedure. This will not affect awards for automatically unfair dismissals or redundancy.

Managing risk and expectations

With day one rights for ordinary unfair dismissal, employers must be more diligent in managing early employment relationships. This includes:

• Robust recruitment processes: Scrutinise CVs, check references, and ensure safer recruitment practices (for education sector employers).
• Clear onboarding: Define roles, responsibilities, and expectations from the outset.
• Regular feedback: Hold frequent one-to-ones and document performance discussions.
• Early intervention: Address underperformance promptly and clearly.
• Documentation: Maintain a paper trail of meetings, feedback, and decisions.

Preparing for change

Although the introduction of day one unfair dismissal rights under the ERB is not expected to take effect before Spring 2027, now is the time to:

• Review your use of contractual probationary periods.
• Consider how statutory and contractual probation will interact.
• Train managers on new procedures and documentation practices.
• Monitor government consultations and updates.