Unfair Dismissal Protection – A day one right in the UK

The Employment Rights Bill 2024 (ERB) abolishes the continuous service requirement entirely, granting employees the right to bring an unfair dismissal claim from their first day of employment (as opposed to the current 2 year continuous service requirement).

Notwithstanding this, the Government has recognised that some flexibility is beneficial in the early stages of employment while suitability for the role is still in question. The ERB therefore intends to introduce a modified procedure during an "Initial Period" of employment whereby a shorter form termination process can be used. There are a number of conditions which must be satisfied in order to utilise this exception:

1. The termination of employment must occur on or before the last day of the Initial Period (thought currently to be 9 months) or notice must be given during the Initial Period and the employment must terminate within 3 months of that period;.

2. The employer must show that the reason for the dismissal was one of the following:

• Capability;
• Conduct;
• A statutory bar; or
• Some other substantial reason relating to the employee. 

3. The dismissal will only be fair if the employer follows the steps set out in the regulations – essentially the modified procedure.

Further regulations will be required to provide the details around the Initial Period procedure and the related compensation scheme. Changes to unfair dismissal are expected no sooner than Autumn 2026. 

Given that the modified procedure in the Initial Period is a new legal concept there will undoubtedly be increased litigation as the legislative framework is put to the test, especially when this is coupled with the increase to time limits to bring a claim from 3 months to 6 months (which may come into force in Autumn 2025). Additionally, more employees will be entitled to claim unfair dismissal. It is expected that there will be less claims being shoe horned into discrimination or whistleblowing allegations when these claims have previously been the only options. It is a concern as to how the overrun tribunal system in the UK will cope with any increase in claims as backlog for tribunals is currently at a record high.

It will remain feasible to dismiss employees with short service quicker than those gaining ordinary unfair dismissal rights but there will now be a standard of fairness for those dismissals. In redundancy situations all employees will have unfair dismissal rights and should be treated the same. This is due to the view that redundancy is not a reason specific to an employee and therefore all employees regardless of length of service should be treated the same. 

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Hollie Ball advises employers in the public, private and third sector from start-up businesses through to charities and multinational corporations. Hollie has a special focus on advising charity clients working closely with chief executives and trustees.