Plans to grant all workers the right to claim unfair dismissal from day one have been scrapped by the government, a major U-turn on Labour’s manifesto commitment and a key feature in the Employment Rights Bill.
The change, which comes as an amendment to the Bill currently working its way through Parliament, will mean that the right will only come into force after six months in employment.
This will be of significant interest to employers, as much as to their employees, for a number of reasons:
- Giving greater flexibility to trial new hires, reducing the risk of letting someone go if it doesn’t work out during a probation period.
- Reducing the legal risk and administrative burden in the early days of employment.
- Protecting flexibility and reducing costs for employers, especially SMEs who are particularly vulnerable to employment law claims.
- Supporting organisational agility and responsiveness during uncertain economic times, giving employers the confidence to shift staff around and scale up or down depending on demand.
From a legal perspective, removing the day one right will help the already overburdened Employment Tribunal system avoid a surge in claims.
It would also mean that future governments will face greater difficulty in being able to make further amendments, given the change is taking place to primary legislation, rather than by utilising existing powers to make changes to the existing Employment Rights Act 1996.
This is not the first time the government has made notable changes to the Bill, having removed the proposed “right to switch off” outside of working hours in a previous tranche of amendments.
Natalie Ward, Partner in Thrings Employment team, said: “While this change marks a clear attempt by the government to break the deadlock in progressing the Bill through Parliament, it means that the government will have U-turned on another major election promise, which will be a massive disappointment to workers and trade unions that had hoped for the protection this right could provide.
“It will, however, be a boon to businesses as the hiring process will be less risky and will give them more flexibility in managing their staff. It is still vital that they continue to ensure contracts and HR processes are regularly reviewed and updated, as well as seeking legal advice at the earliest possibility if any challenges should arise.”
Thrings’ Employment lawyers are experienced in dealing with business matters that affect the workforce and has acted for both employers and employees from start-ups and SMEs all the way to multinational corporations across a wide range of employment matters. To find out how they can help strengthen your polices, and solve your disputes, please get in contact.
