One aspect of ministers’ pledge to introduce day-one rights for employees in the forthcoming Employment Rights Bill that hasn’t attracted a lot of attention concerns the timing of a new law coming into effect, writes employment law specialist Dan Pollard.
The government’s plan for day-one rights is likely to lead to a significant uptick in dismissals over the coming months as employers seek to exit staff to head off the change.
Labour has pledged to guarantee “day one rights for all workers,” which would eliminate the current requirement for employees to have two years’ service to be protected from unfair dismissal. This qualifying period was increased from one to two years by the coalition government back in 2012.
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After an employee has two years’ service employers must have a valid reason to dismiss. Acceptable reasons include redundancy, performance and ill health. Employers also have to follow procedures that look simple on paper but which can be onerous in practice and involve significant management time.
It is expected that the changes will be set out in a new Employment Rights Bill and employers will be able to include a probationary period although it is not yet clear exactly how these will work.
The big unanswered question is whether all employees will immediately enjoy day-one rights or if they will only apply to those hired after the Employment Rights Bill becomes law.
Most employers and lawyers are assuming they will apply to all employees immediately meaning that around a third of the working population will gain rights overnight likely sometime later this year.
We have already seen cases where employees have been dismissed without any process, almost certainly to ensure that they do not gain rights if the law changes, whereas previously there would have been a discussion about an amicable departure before termination.
While the government’s aim is to enhance job security the immediate impact may be that employers seek to bring forward mass layoffs and exit poor performers before the changes come in to reduce the risk of claims. As employees’ only recourse in this situation is to look to discrimination and whistleblowing protections we expect an increase in complex litigation over the coming months.
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