Unfair dismissal: A day one right

We previously discussed the employment law changes we expect from the Labour government including the introduction of day one rights, such as protection from unfair dismissal.

Currently, only employees with two years’ continuous service have the right to make a claim for ordinary unfair dismissal. The King’s Speech made clear that the Labour party has maintained its proposal to remove the requirement for continuous service, to afford workers immediate protection against unfair dismissal i.e. from the first day of employment.

The key wording is ‘worker’ as this proposal will run in conjunction with the suggestion to move towards a single ‘worker’ status by combining the rights of employees and workers. These changes will likely increase unfair dismissal claims because a larger group of people will be afforded day one protections.

The proposal does not prohibit fair dismissals or affect probationary periods. However, the effect of the proposal means that employers will only be entitled to terminate employment if they have a fair reason (such as capability, conduct or redundancy) and by following a fair process. While this proposal does not alter the unfair dismissal protections for employees with at least two years’ continuous service – employers will need to take extra care when seeking to fire newly hired employees who are no longer subject to a probation period(s) and/or individuals who will soon fall into the new worker status.

Some employers have chosen not to use probationary periods because new employees do not have the required continuous service to bring an ordinary unfair dismissal claim. Given that this is to become a day one right – employers will need to reconsider the use of probationary periods to protect themselves against potential unfair dismissal claims. Effective implementation and management of probationary periods will be pivotal in helping employers manage new employees and their ability to perform their role properly.

Considerations for employers

Employers can be proactive and take steps now to:

1. Review and update template employment contracts – consider the different job roles and seniority levels for new hires to ensure the probationary period allows sufficient time to assess performance and confirm continued employment. The probationary period should also make clear that employment may be terminated on shorter notice, if capability and performance are not up to the expected standards
2. Update template probation period clauses – ensure that contracts include a clause which gives employers the discretion to extend a probationary period in certain specified circumstances. For example, where an employee is off sick for a prolonged period or if certain goals are not met within a certain timeframe. By reserving the right to extend probation periods, employers are afforded greater flexibility to fully assess performance and capability and potentially exercise their right to terminate employment on shorter notice
3. Assess performance and continue ongoing monitoring for new hires – it is important that performance issues are considered and assessed at an early stage and throughout the probationary period. Performance concerns should be raised when they arise and communicated to employees in regular intervals and followed up in writing. Employees should be aware of their progress throughout the probationary period. Employers put themselves at risk of claims for unfair dismissal, if an employee is not aware of their need for improvement until the end of the probationary period and/or on termination
4. Keep records of discussions – any discussions should be documented so employers may refer to it in support of a performance related dismissal or when seeking to establish reasons to extend the probationary period
5. Update and amend workplace policies – performance related policies should be updated so that employees are aware of a wide-ranging set of circumstances in which probationary periods are extended, passed or failed. The criteria should be tailored to specific business considerations. Clear and unambiguous criteria will allow employers to better justify making performance related dismissals and employees will be aware from the outset of the approach the employer intends to follow
6. Ensure best practice during the induction and onboarding processes – employers should re-evaluate their induction and training processes for new hires to ensure they are detailed and meaningful. Job descriptions should be updated to ensure any performance objectives are clearly communicated from day one. Not only will this seek to ensure that new hires are trained and perform accordingly, but it may also serve to reduce the risk of a claim in the Employment Tribunal for unfair dismissal.

If you have any questions about unfair dismissal or require our assistance, please speak to a member of our Employment team.