The Employment Rights Bill, currently passing through Parliament, represents the most significant reform to UK workplace protections in decades. Under the new law, due to take full effect in 2027, every employee will enjoy unfair dismissal protection from day one of employment. To balance this extension of rights with employer flexibility, the Bill also introduces an Initial Period of Employment (IPE), similar to a probationary period, during which a simplified dismissal process will apply.
Current Law on Unfair Dismissal
Currently, the Employment Rights Act 1996 provides employees with two years of continuous service protection from unfair dismissal. During this qualifying period, only dismissals for automatically unfair reasons, such as pregnancy, whistleblowing or asserting a statutory right, aswell as discrimination, are actionable. Where an employee has two years’ service, the employer must show that there is a potentially fair reason for dismissal and follow a fair process to avoid claims for unfair dismissal.
Proposed Changes under the Employment Rights Bill
Day-One Unfair Dismissal Rights:
The Bill abolishes the two-year qualifying period, granting all employees immediate protection from unfair dismissal from their first day of employment, although it retains probationary periods.
Initial Period of Employment (IPE):
To protect employers from undue risk, every new hire will enter an Initial Period of Employment (IPE), which is a formal probationary phase which will enable employers to dismiss employees more easily in the early months of employment. The IPE is expected to last up to nine months, during which a streamlined ‘light touch’ process will apply. Key features include:
- Holding a formal meeting with the employee to explain concerns.
- Allowing the employee to be accompanied by a colleague or trade union representative.
- Making reasonable efforts to improve performance, where relevant.
The aim is to strike a fair balance between protecting employees from unfair dismissal while limiting the risks employers face during probationary periods.
Implications for Employees and Employers
For Employees:
Employees will benefit from universal protection against unfair dismissal from day one, meaning greater job security. Additionally, employees will benefit from clearer feedback and improvement plans during the IPE.
For Employers:
Recruitment and onboarding will require more planning, care and attention, with employers expected to set up strong systems from the start. Reliable performance management procedures will be essential to support any dismissal during the IPE, ensuring decisions are fair and well-documented. Pre-employment screening processes, HR policies, employment contracts and staff handbooks will need to be updated to reflect the new legal protections, clearly outlining updated procedural requirements.
To prepare, employers should review and revise contracts and set out the IPE process in detail. A formal system should be introduced to set performance goals, hold regular feedback meetings and record all discussions. Managers will need training on how to apply the lighter dismissal procedures during the IPE. Internal guidance should also be refreshed so managers know when full dismissal processes apply and when a simpler approach is acceptable.
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