Is the U-turn on unfair dismissal rules in the Employment Rights Bill good for business owners?

The Employment Rights Bill is set to become law soon and it seemed like the details were secure.

However, a last-minute U-turn from the Labour government has led business owners once again on the back foot.

We want to explore what the change means and how businesses can still work to stay compliant.

What has changed with the Employment Rights Bill?

The Employment Rights Bill is designed to bring in a cavalcade of additional rights to provide a more stable, secure work environment for employees even if it may increase the administrative and financial pressures on businesses.

One of the tentpole features of the Bill centred around an expansion of day one rights for workers to ensure that all employees receive the same treatment regardless of their length of employment.

Shockingly, the Government has now backed down on day one protection for unfair dismissal and is instead going to introduce a six-month grace period instead.

This is still a reduction from the 24 months that currently exists, but the last-minute nature of the change has drawn ire across the aisle.

Workers feel robbed of additional protection while employers are once more left to change course in the wake of yet more Government indecisiveness, even if the change is ultimately beneficial.

What will the change mean for businesses?

It is relatively standard for many businesses to operate a six-month probationary period in which they determine the suitability of a new recruit for the role long term.

While the previous rules allowed for some extension of the probationary period without much legal difficulty, the new rules are set to make the six-month probation a more strict process.

Our team of HR experts have reviewed the proposal and can advise you on the best ways to manage your new obligations under the Employment Rights Bil.

In particular, you need to reassess how you handle the probation period given that it is the only opportunity to let employees go without fear of repercussion.

It will soon be essential to do a strict midpoint probationary review at three months into the employment.

This needs to involve reports from relevant managers and HR personnel.

It should serve to illustrate how the employee has been performing and what they need to do to improve or adjust to the responsibilities of the role.

This will be followed by a full review at five months wherein a decision of suitability needs to be made.

It is no longer feasible to give a struggling employee the full six months as there is a risk of letting them slip past the threshold and created by the Employment Rights Bill.

Instead, make a final decision at five months and offer a full contract or wind down their employment and send them onto pastures new.

We hope that this will be the last major update to the Employment Rights Bill before it becomes law, but there is no way to know until it is fully enacted.

Regardless, we are here to support you as you adapt to the new challenges imposed by the Bill so that you can stay efficient and compliant when managing your team.

Speak to our HR team today for full support with your responsibilities as an employer!

Juliet Mellues