A Significant Shift in Labour’s Plans on Unfair Dismissal – And Some Good News for Employers

Last week saw a major shift in the Labour Government’s proposals on unfair dismissal and the qualifying period – and, importantly, the change is for the better.

The original plan was to scrap the qualifying period altogether, giving employees a day-one right to claim unfair dismissal. Unsurprisingly, this caused considerable concern for employers.

There was also discussion about creating a new “probationary period” with a reduced, light-touch process. This would have required fresh legislation and new procedures for employers to follow.

Fortunately, it appears that common sense has prevailed.

The updated proposal

The Government has now confirmed that the qualifying period will be reduced from two years to six months. There will be no day-one rights and no new procedural requirements.

What this means for businesses

While this announcement is certainly better than the original proposal, it still represents a significant change.

Employers will need to ensure they assess new employees more rigorously during the first few months. In practice, this may also mean that where there are doubts about a new starter, businesses will more readily choose to exit them before the end of the six months rather than have to follow lengthy procedures later on and risk a potential claim. That’s not ideal for either the employee or the employer.

When will the change take effect?

According to the Employment Rights Roadmap, the changes to unfair dismissal are not due to come in until 2027. Given that this new proposal would not require any primary legislation to enact, it is not clear whether this timeline might change. Businesses still need to prepare, so hopefully, if the change does come in 2027, it will give employers valuable time to review and strengthen their onboarding, training and early-stage assessment processes.