Managing Day One Protection from Unfair Dismissal

The employment law landscape is undergoing significant transformation in 2025, with a raft of reforms recently in force or on the horizon.    In a world where many jurisdictions appear to be pulling back from workers’ rights (think Trump’s approach to DEI), it is quite a contrast  that here in England and Wales, there is a broader push towards greater worker protections, fairer workplace practices, and increased employer accountability.  

However, while good employers are keen to ensure their workers are treated fairly, that does not mean that these increased rights don’t come with added financial and administrative pressures on businesses, at a time where employer costs are ever increasing .

In this article, we look at one of the major changes– the removal of the two year qualifying period for protection from unfair dismissal and its impact on the employment relationship.. 

Under the proposed Employment Rights Bill, employees will be protected from unfair dismissal from the very first day of employment.  Although this change is not due to come into effect before autumn 2026, employers should begin preparing now for this fundamental shift.

The key impacts are likely to be:

Increased Job Security

o   Employees will have immediate protection from unfair dismissal as soon as they start work.

o   It is hoped that this change will foster greater trust, engagement and loyalty among employees who no longer feel vulnerable to arbitrary dismissal.   It could, of course, have the opposite effect whereby employees know it is harder for an employer to dismiss and so the initial drive to succeed may be dampened.

Heightened Accountability

o   Employers will need to justify dismissals from the outset, ensuring they have clear, fair, and documented reasons for termination such as misconduct or poor performance and will have to follow a fair process.

o   Dismissals can be challenged immediately which is likely to mean a significant increase in Employment Tribunal claims in an already  overstretched and under-resourced system.   People Management have suggested that the removal of the qualifying period for unfair dismissal protection will increase the workload of Employment Tribunals by at least 15%.

o   Employers will need to invest in vigorous recruitment processes to ensure that they have the right person for the job from the outset.    Subsequently, more robust performance management and misconduct processes will need to be implemented with clear communication of expectations and thorough documentation from the start.

 Increased Importance of Probationary Periods

o   It is anticipated that the new regime will introduce an “initial period of employment” which  effectively will be a statutory probationary period expected to last up to 9 months where a lighter-touch dismissal process is likely to apply.

o   During this period, employers are likely to have more flexibility to dismiss employees for fair reasons which they are able to justify, but must still follow a basic process, such as holding a meeting to discuss those concerns and allowing the employee to be accompanied in the usual way.   Importantly, this lighter touch process will not apply to redundancies and a full and fair consultation process will need to be followed for all employees regardless of length of service.

 o   Compensation for unfair dismissal in this initial period will likely be reduced from the current cap on compensation for unfair dismissal after the two year qualifying period which is the lesser of a year’s pay and £118,223.   The reduced amount for dismissals during the initial period of employment is yet to be announced.

 Operational and Cultural Implications

o   The anticipated surge in unfair dismissal claims will require employers to review and update their HR policies, train managers in fair performance management and misconduct processes and implement robust record-keeping procedures.

o   HR teams will likely face a significant increase in case management activity such as grievances and advisory work.   

 o   It will be vital for managers to be pro-active in addressing performance or conduct issues early, fostering open dialogue to resolve problems before they escalate.

In our next article, we’ll look in more detail at importance of probationary periods and how employers can manage them effectively.