Aisling McAuley

Day-One Dismissals

A key development in the Employment Rights Bill was the Government’s decision to scrap protection from unfair dismissal. Solicitor Apprentice Aisling McAuley of our Employment team takes a look at the change.

The retreat from “day-one” unfair dismissal rights with a twist

As the Employment Rights Bill nears its final Parliamentary stretch, employers are welcoming a key amendment: the scrapping of ‘day-one’ protection from unfair dismissal. What was once a bold pledge by the Government, has now been replaced with a more modest commitment – a six-month qualifying period before workers can bring claims for ordinary unfair dismissal. The move is viewed as a compromise and will assist an employer’s ability to manage hiring with a less immediate threat of litigation.

However, in a further significant development the Government appears to be ready to lift the cap on unfair dismissal claims which has been a cornerstone for negotiations around employee exits. It is not clear at this stage what form this will take. The current maximum compensatory award for ordinary unfair dismissal is the lower of £118, 223 or one-year’s gross pay. Whilst the position is to be clarified, we expect that the maximum will now be the current figure of £118,223. This is reviewed annually and usually increased in April each year.

What the change means for employers:

For employers, the shift from a “day one” right brings a measure of relief and renewed flexibility. Some implications that stand out:

1. More time to assess new hires. A six-month window gives employers time to assess whether a recruit is a good fit, evaluate performance, and make an informed decision about the future, without the immediate risk of litigation.
2. Reduced risk. The day-one protection raised fears among many employers around probationary dismissals leading to tribunal claims. The new qualifying period lowers that risk and takes away the complexities linked to day-one rights and probationary periods.
3. Clearer legal and administrative framework. Employers retain greater certainty about when dismissal protections apply and when they don’t.
4. The potential financial exposure increases. The Government has increased the maximum compensatory award for unfair dismissal, which will result in the risk of higher financial awards with the impact this will have on negotiations. Employers will therefore need to ensure any dismissal after six months can be justified and is procedurally fair.
5. Employers will also need to reassess employment contracts and HR policies, to ensure that probation and dismissal procedures align with the new legal framework.
6. Ensure documentation and performance monitoring are robust. From day one, it is important to maintain clear records of performance evaluations, warnings and training, reviews, particularly within the first six months.
7. Update HR policies and training. Train managers on fair-dismissal procedures, to reduce the risk of tribunal claims.
8. Plan ahead for the post six-month risk. Anticipate that after the six-month mark, dismissals will need stronger justification.
9. Have a rigorous recruitment process and ensure that contracts are issued with the offer letter.

The six-month qualifying period is widely seen as a compromise that balances improving workers’ rights with preserving operational flexibility. It reflects a pragmatic approach to the Employment Rights Bill to incorporates the concerns of the business community. For most employers, this is a welcome compromise. That said – the risk does not vanish. For those who pass six months, protections remain robust requiring employers to adapt with stronger HR practices and refined recruitment. The new approach allows a manageable path forward – balancing fairness with the flexibility that businesses need in an uncertain economic climate.

For more information about this change, please contact Aisling McAuley on 01423 530630.