Towards the end of last year, we reported on dramatic delays in the passing of the Employment Rights Bill, resulting from a parliamentary tussle between the Commons and the Lords over the future of unfair dismissal laws.  As you may recall, the Labour government had plans to make unfair dismissal a ‘day one right’.  The House of Lords had other ideas.  Ultimately, the House of Lords prevailed, and we now expect the requirement for a period of qualifying service to be retained, although it will be significantly shortened from 2 years to just 6 months.  

So, when will this change come into force, and how should employers begin to prepare?

Need a little time…

Given the significance of such a shortening of the qualifying service requirement, thankfully, this measure will not come into force until January 2027.  This gives employers at least some time to prepare.  Nevertheless, the practical implications of this future change will be felt almost immediately.  After all, any employee who commences new employment on or before 30 June 2026 will already have 6 months’ service when the law changes in January 2027.  As a result, all such employees will inevitably have unfair dismissal rights with effect from 1 January 2027.

What should you be thinking about?

Many employers will have employment contracts which contain 6-month probationary periods.  These probationary periods can often be extended by up to a further 3 months, if the employer feels that it needs more time to assess an employee’s suitability for long-term employment.  Whilst these sorts of arrangements are perfectly fine for now, for any employee who starts work on or after 1 April 2026, employers will need to carefully think through any decisions relating to the extension of 6-month probationary periods.  

Come what may, and comfortably in advance of the end of the year, employers should consider whether they need to review their relationships with any employee with less than 2 years’ service.  If there is any reason to think that an employee’s employment might need to be terminated (whether for performance-related reasons or otherwise), employers would be well advised to act on these dismissals comfortably before the end of the year.

Need a hand?

If you need a hand working out how these changes impact your contractual arrangements and your practices in relation to probationary periods, please get in touch.

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