The new year is always a time when people consider a new start with a new job. Taking on a new employee creates risk and opportunity for an employer. Planned changes to employment law may mean more risk for employers and fewer opportunities.
The Government recently stepped back from its original proposal under the Employment Rights Bill (ERB) to implement ‘day-one’ unfair dismissal rights for employees and instead introduced a six-month qualifying period for unfair dismissal. The original roadmap published alongside the ERB suggested that the new qualifying period would be introduced in early 2027, but it is now likely that the Government will be fast tracking the new law so that it will take effect from early 2026.
The House of Lords had pushed back on the day-one rights pledge and insisted that a nine-month statutory probation period would need to be utilised as an alternative buffer for the enhanced rights. Having consulted with trade unions on the point, the Government has compromised on one of its major manifesto pledges by sacrificing the day-one right to unfair dismissal protection and instead will be reducing the qualifying period for unfair dismissal from two years to six months. As a result, the change has been fast-tracked to a far earlier implementation date believed to be early 2026 and without further consultation on the point.
This will mean that employers will have to dismiss for a fair reason and only after having followed a fair process for those employees who have six months or more continuous employment. In addition, the Government has also just announced that it is removing the cap on the unfair dismissal compensatory award. Whilst in practice, many claimants do not get compensation anywhere near the cap (currently the lesser of a year’s pay or £118,223) the removal of the limit could have significant implications for employers facing claims from higher earning ex-employees.
This means that getting recruitment right, training new starters and properly managing probation periods has never been more important.
Recruitment
Getting the right people is a constant challenge for employers. It’s therefore always helpful to ensure that any new role comes with a detailed job description so that both employer and employee are clear on what’s expected. Recruitment is time consuming but doing it properly is critical to attracting good candidates and then properly assessing them at interview. Robust interviewing and selection processes also minimise the risk of any discrimination claims.
Job offer
Once you have selected your chosen candidate, it’s time to put the offer in writing. For most roles, we would recommend always sending the contract of employment with the offer letter. This ensures that all terms and conditions are known and accepted before the employee commences employment. Remember to make sure that you tailor the contract to the individual wherever necessary as this is your ‘golden opportunity’ to do so. This is particularly important in relation to notice periods and restrictive covenants.
Induction/training
Once your chosen candidate starts you will want them to hit the ground running. This should never be at the expense of a proper induction, ensuring they are aware of your policies and procedures and have all relevant training to perform their role. Claimants in employment tribunals often seek to rely on poor onboarding to justify their actions later.
Probation
Most employers now have probation periods, but they are often not properly managed and many employees slip into continued employment without proper assessment. Probationary periods regularly last for at least six months (and sometimes longer), so employers are encouraged to consider a thorough assessment of an individual’s suitability for their role sooner, rather than later, in the early stages of employment and certainly before the expiry of six months.
Indeed, if the new legislation follows the course of the current law, employers will need to be thinking about any dismissal by month five, due to the fact that employees are entitled to one week (seven days) minimum notice – so the entitlement to unfair dismissal may actually arise at ‘six months less one calendar week’ and not six months.
This means that employers should have a structured approach to probation periods and ensure that key dates are in the diary.
For more information about the upcoming changes to employment law and how they may affect your business, contact Howes Percival’s Employment Team.
The Howes Percival Employment Team will be delivering a training session for HR professionals and businesses, in partnership with the One Group, at Howes Percival’s offices in Rushmills, Northampton, on February 24 from 9am to 11.30am.
For further details contact Graham Irons on 01604 258558 or email graham.irons@howespercival.com
Employment Partner
Howes Percival
