The Impact of Day One Unfair Dismissal Rights

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by Rebecca Lister | 7th Nov 2024

The introduction of the Employment Rights Bill marks a significant shift in employment practices, aimed at creating a new deal for employees across the UK.

Alongside the extensive list of proposed changes to the UK’s employment landscape, one of the new Labour Government’s significant policies concerns unfair dismissal law, Day One Unfair Dismissal Rights.

In the new legislation under the Labour Party’s Make Work Pay plan, employees will be given unfair dismissal rights from day one of their employment, in juxtaposition to the current laws requiring 2 years’ service. This reform is designed to provide better protection and empower staff in their roles.

Strengthening Employee Rights

By doing so, the Government looks to strengthen the rights of employees and offer greater protection within the workplace. It is expected that an additional 9 million employees will be granted unfair dismissal rights. However, in light of these changes, we must question how they will affect the wider employment landscape.

Currently, employees can only obtain unfair dismissal rights when they reach two years of qualifying service with their employer, save for a limited number of exceptions. These exceptions can include automatically unfair dismissals on health and safety and whistleblowing grounds.

Implications for Employers

As the law currently stands, during these first 2 years of employment, employers can dismiss short-serving employees relatively easily without going through the same procedures they would otherwise have to. This has resulted in many employees trying to shoehorn claims into one of the exceptions to seek some level of recourse, resulting in weak claims and low chance of success.

The lengthy wait for the right also puts employees in a risky position when considering moving jobs. This makes people more apprehensive about switching roles, possibly leading to reduced productivity as individuals stay in roles that they would otherwise wish to move on from. Updating the current laws aims to remove this apprehension and encourage workers to move jobs when it would benefit them to do so.

Potential Legal System Challenges

Be that as it may, there is potential for these changes to cause greater issues for the legal system as a whole. With backlogs and long wait times already common within the employment tribunal process, we must question to what extent these changes will exacerbate an already struggling system.

It is not unusual for hearings to now be listed 18 months or more after the claim was issued, and this is likely only going to get worse if claim numbers increase. Introducing new laws that are inevitably going to lead to more claims, risks putting cracks into a system that is already cracking and without matched increases in tribunal funding, there are widespread concerns over how the system will cope.

Mediation as a Solution

While the new Government has suggested plans to alleviate this pressure by looking to resolve any disputes before they escalate through ACAS mediation, in reality this is unlikely to provide enough support. Encouraging people to use mediation would in theory reduce the strain on tribunals, however, the ACAS system is also inundated and lacking the appropriate funding to ensure it can function effectively.

It seems that these proposals, while well-meaning, could just be putting a plaster over one issue, while failing to address the wider problems within the system.

What this means for you?

While it will be a while before the new laws come into force, now is the perfect time to prepare for the upcoming developments. While, these changes do bring challenges and possible consequences for businesses, by reviewing your policies and keeping afloat of developments, you can help your organisation to thrive.

Undertaking a review of your current policies is a great way to ensure your organisation stays compliant and both you and your employees are protected. Getting ahead of the game by looking to train management to proactively and effectively deal with any issues, can also be another great way to ensuring you are prepared for the upcoming changes.

If you do require any support or guidance around these forthcoming changes including Day One Unfair Dismissal Rights or to discuss any other employment related matter, feel free to contact us.

How Can We Help?

Here at Eclipse HR, we are best positioned to help you navigate this transition period. Whether helping with policy reviews or providing you with HR support so you understand your position in light of the new changes, our expert HR consultants have years of experience in dealing with such matters across a variety of different sectors and keep well up to date on this quickly developing area.

Working as an integrated team alongside leading law firm Whitehead Monckton Ltd, who specialise in UK employment law, also ensures that should you need expert legal advice on this issue, or any other, the integration is seamless, and the support offered is of the same high quality.

Don’t wait—prepare your organisation for the new deal in employment and ensure a smooth transition to the upgrade to rights. In light of the wide-scale reforms, including Day One Unfair Dismissal Rights, the new Government is planning to introduce, we are offering clients a review of their employment contracts and handbook at a discounted rate. To find out how we can help, Get in Touch.