Unfair dismissal, ‘day one’ rights and probationary periods…
In this article we consider Labour’s proposal of a new ‘day one’ right of unfair dismissal.
At present, an employee must have at least two years continuous service before they have the right not to be unfairly dismissed. This provides employers with the flexibility to make their minds up about an employee within the first two years of their employment, without having to show fairness should they wish to dismiss an employee.
Providing unfair dismissal rights from day one of employment therefore hinders the flexibility employers currently enjoy. This was recognised in the Labour party’s “Making Work Pay” plan, Labour commented that “This will not prevent fair dismissal, which includes dismissal for reason of capability, conduct or redundancy, or probation periods with fair and transparent rules and processes. We will ensure employers can operate probationary periods to assess new hires.”
Interestingly, provided there are fair and transparent processes in place, employers will be able to fairly dismiss employees within an agreed probationary period, even though, officially, unfair dismissal would be a day one right. This does, of course, mean that prescribed probationary periods may be introduced by the Employment Rights Bill, which in turn raises two questions, firstly, how long could a probationary period be and secondly, what “fair and transparent rules and processes” will an employer need in a probationary period?
In response to these two questions, and in the absence of any guidance, our guess, based on previous Labour governments is that the probationary period is likely to be between six months to one year, the latter being more realistic. A one-year probationary period would, effectively, act as a one-year unfair dismissal qualifying period without adversely impacting the flexibility employers require in the current economic climate. Whilst being mindful of economic growth, Labour also needs to appease the trade unions as to what the “fair and transparent processes” should be. We do not consider such a process will be administratively complex and anticipate, at the very least, that employers will set targets and hold meetings to discuss the employee’s progress against set targets. Towards the end of the probationary period, we envisage a final meeting to decide whether the employee has passed or not.
Evidently, we need to see the detail behind the proposal, and we will of course update you further as soon as the government publishes the Employment Rights Bill.
If you have any questions or queries on unfair dismissal or employment law in general, get in touch and we’d be happy to discuss how we can help.
