Day 1 unfair dismissal rights still under debate

Sally Bird, Partner

One of the key rights included in Labour’s Employment Rights Bill, and one of its most controversial, is making protection from unfair dismissal a day one right, instead of one which arises after two years continuous service.  If implemented this would be a generational change in employment law and HR practice -there would be no such thing as a straightforward dismissal (to the extent there can be in a culture of increasing use of AI to advance weak or time-barred claims).

This key government policy is supported by the House of Commons where Labour has a majority. It is a manifesto pledge which the government is guarding carefully, though we currently await the Autumn budget where it is widely predicted that Labour will breach its manifesto pledges in relation to taxation.

However, there are stumbling blocks along the way, as the House of Lords has twice rejected this and proposed instead a 6-month qualifying period. This is still a significant move from the current position, reducing the length of qualifying period by 75%. However, this enables employers at least a period to assess an employee’s competence and fit in their role before it becomes necessary to follow detailed processed to ensure a fair dismissal. It is also equivalent to the length of most contractual probationary periods and so fits with wider employment practice.

The proposal for day one rights is, the government argue, mitigated by the concept of a statutory probationary period, which it has been said could up to 9 months. However, this would operate differently from how many traditional probationary policies work in practice and still require a basic procedure to be followed, creating the need for a “two tier approach”. This would create confusion and a need to review and change existing contracts and ways of working. The 9-month statutory period was described by the left-leaning think tank the Resolution foundation as a “messy compromise that risks confusing employers and preventing them from taking people on”.

There is significant concern about the potential economic impact of this right, in particular on smaller businesses, and in the wake of the impact of last year’s budget and the increase to rates of employer’s national insurance contributions. The increased risk and procedural burden underlines concern that this would significantly deter employers from hiring staff, impacting on unemployment and economic output. There are also concerns that this would add additional burden on a tribunal system which is already bulging at the seams -where we are seeing it take several months to process and service claims, and tribunal hearings already being listed into 2027.

The matter will return to the House of Lords and it remains to be seen whether this will be pushed through, thought the government, as yet, are not blinking.

Since the introduction of the right to claim unfair dismissal in the 1970s, the qualifying period has fluctuated between 6 months and 2 years, but has been stuck at 2 years since 2012, and so is deeply enshrined in HR practice. Even if the day 1 right is not pushed through, the alternative of 6 months is a much shorter qualifying period and a big change which will be a wake-up call for those not accustomated to early-stage performance management, formal disciplinary processes and operating more nuanced probationary procedures.

Our fixed price monthly retainer service offers the ideal solution to employers facing the challenges of these reforms, enabling expert legal advice to be taken to stay on the right side of the legal changes, and which can include a review of existing contracts and policies, including all important probationary period provisions and formal disciplinary and capability procedures.

Acas EC period extended

It is mandatory to go through the Acas early conciliation process before many claims – including unfair dismissal – can be brought in the employment tribunal. Recently, we have experienced significant delays in this process, whereby the volume and backlog of cases has meant that Acas is not taking any steps to conciliate until close to the end of the EC period – or sometimes not at all – which is currently 6 weeks, thus negating the whole purpose of it.

Likely in response to this, on 5 November 2025, the Government set out its proposed amendments to the Acas early conciliation period, which is set to take effect on 1 December 2025. The changes will extend the early conciliation window from six weeks to twelve weeks and will apply to all claims where early conciliation is commenced on or after 1 December.

If your business has been contacted by Acas regarding a potential claim, we can assist by conducting the early conciliation period on your behalf. Please contact info@kuits.com or 0161 832 3434 for more information.