How the First-day Unfair Dismissal Qualifying Period Could Affect Employers

Among the changes in the government’s employment rights bill, the removal of the unfair dismissal qualifying period stands out as a potentially impactful reform for employers

CREDIT: This is an edited version of an article that originally appeared on People Management

The government’s employment rights bill, detailed in the King’s Speech, introduces a comprehensive set of changes to employment policy and legislation. Among these are improvements to statutory sick pay and expanded parental leave. However, the proposed removal of the unfair dismissal qualifying period, part of the new ‘day one’ employment rights, may have wide ranging implications on employers.

What Would the Change Mean?

The government has indicated that employers will still be allowed to use probationary periods when evaluating new hires, but the specifics of how this will be implemented remain unclear. Early feedback from the Chartered Institute of Professional Development’s discussions with members suggests that fully eliminating the unfair dismissal qualifying period could lead to unintended consequences.

The qualifying period for claiming unfair dismissal has varied over time, ranging from six months to two years, and has been set at two years since 2012. According to the CIPD’s Spring 2024 Labour Market Outlook survey, 46% of employers preferred maintaining the two-year qualifying period when surveyed before the election.

Employer Concerns

The primary concern with reducing the qualifying period is that it may complicate performance management, with 21% of employers expressing this worry. Additionally, 19% of employers are concerned that it could make it more challenging to determine if new hires are a good fit for their roles, while 15% fear it might lead to a rise in employment tribunal claims.

However, 48% of employers surveyed see potential benefits in reducing the qualifying period. Some view it as an opportunity to enhance performance management, with 25% believing it would drive improvements in how performance is handled, while 24% think it would encourage better conflict prevention and management.

Adapting to the removal of the qualifying period will require extensive updates to employment contracts and adjustments to various people management practices, including probation procedures, performance management and individual dispute resolution.