Right to claim unfair dismissal
Employees currently need two years’ service before they can bring an employment tribunal claim for ordinary unfair dismissal. In most cases, this means that you have flexibility to dismiss an employee if things aren’t working out without going through an extended process.
Expanded unfair dismissal rights
The government initially proposed to introduce a day-one right for employees to claim ordinary unfair dismissal. But after much debate, it agreed to set the qualifying period at six months. It is also abolishing the compensation cap (both the 52 week’s pay and £118,223 limits). The qualifying period for the right to request written reasons for dismissal will also reduce to six months.
These changes come into force on 1 January 2027 and will apply to all employees who already have six months’ service at that point, and to others as they progressively acquire six months service.
Getting your organisation ready
Probationary periods
If you include probationary periods in your contracts of employment, check to see whether you impose a standard length of time to determine whether someone is suitable. You may need to make decisions about terminating employees whose performance or behaviour is unsatisfactory much earlier than you currently do. Probationary periods should reflect this. In many cases, three or four months will be appropriate and will give you some flexibility to extend the probationary period for a short period of time. Review dates
You must accurately schedule review dates to ensure that you make decisions about the suitability of an employee in good time. Unless the employee is dismissed for gross misconduct you must give them at least a week’s notice to terminate their employment. Their effective date of termination must take place before they attain six months’ service.
Disciplinary policies
You may need to update your disciplinary policies and capability procedures to allow you to dismiss employees whose behaviour does not meet your standards, or whose performance is not up to scratch, without going through lengthy procedures.
Unfair dismissal claims
You should also anticipate receiving more claims of unfair dismissal. To minimise your legal risks (and potentially high awards) make sure that your managers know the correct way to handle disciplinary, capability and grievances hearings.
Key impacts at a glance
More employment tribunal claims
Longer dismissal processes
Increased scrutiny on decisions
Start preparing now
Our Back-to-Basics training gives your line managers the tools they need to lead with confidence.
With modules including handling disciplinaries and performance management, your managers will increase their confidence in managing these processes. They’ll understand what they should do to demonstrate they have followed a fair process, gain a clear understanding of relevant policies they need to consider, (and relevant ACAS Codes of Practice) and know how to adhere to best practice.
