The Employment Rights Bill represents one of the most significant employment law reforms in decades, fundamentally changing how businesses manage their workforce from day one of employment. With unfair dismissal protections extending to all employees regardless of service length, employers must urgently reassess their recruitment, management, and dismissal practices to avoid costly tribunal claims and operational disruption.
This guide is designed for HR professionals, business owners, and in-house legal teams who need to understand exactly how these changes will impact their day-to-day operations. You'll discover the key legislative changes, practical steps to future-proof your employment practices, and strategic approaches to managing the transition period before the reforms take effect in Autumn 2026.
If you're concerned about how these employment law changes might affect your business or need expert guidance on updating your HR policies and procedures, our experienced employment law solicitors can provide tailored advice to ensure you're fully prepared and compliant.
Contents:
What is the current position and what’s changing?
At present, employees must generally have worked for their employer for a minimum period of two years before they qualify for the right to claim unfair dismissal at an employment tribunal.
The Employment Rights Bill abolishes the two-year qualifying period, meaning that all employees will be able to bring a claim for unfair dismissal from their first day of employment. Importantly, it seems there will still be some flexibility to dismiss an employee who isn’t right for the job during a statutory initial period of employment (IPE) by following a ‘lighter touch process’. The details are expected to be published in accompanying regulations, but will likely include a formal meeting with the employee to explain the concerns.
Significantly, the ‘lighter touch process’ will not apply to redundancy dismissals. This means employers considering redundancies will need to follow the same fair process for all employees, regardless of length of service, to manage unfair dismissal risk.
The Bill also introduces a special compensation regime for employees who are unfairly dismissed during the IPE, with the expectation being that a lower cap on compensation will be awarded (the current maximum cap on compensation for unfair dismissal is £118,223, or 52 weeks’ pay if lower).
How long will the IPE be and how will this impact contractual probationary periods?
The length of the IPE has not yet been confirmed, but the government’s stated preference is 9 months. Although contractual probationary periods won’t specifically need to align with the IPE it will become more important to manage new starters during their first few months.
How will these changes affect our current recruitment and induction practices?
With employees being able to bring unfair dismissal claims from day one, it’s going to be more important to recruit the right person at the outset. This is likely to mean spending more time on pre-employment screening and checks and more stringent selection and interview processes. It’s also likely that more management time will be needed during the initial weeks and months to closely monitor performance and ensure that where necessary, dismissals take place inside the IPE.
When will these changes take effect, and what should we be doing now?
The Government has confirmed that the changes to unfair dismissal are unlikely to take place before Autumn 2026 and has said it will openly consult with groups representing businesses and workers on the details before the final regulations are published.
Although we are awaiting further details, including the length of the IPE and what the lighter touch dismissal process will look like, there are several steps we recommend you start to think about now to prepare:
- Review recruitment practices to minimise the risk of hiring someone who’s not theright ‘fit’ – for example, you might want to look at your interview process, look at increasing due diligence checks and more rigorous reference checks.
- Look at how you can manage new employees proactively throughout the probationary period by holding regular meetings with feedback and, importantly, documenting any concerns about performance or conduct.
- Review contracts, policies and procedures. Look at induction processes to ensure new employees know what is expected of them; review sickness absence and capability policies, and check your contracts have a probation period.
- On that point, it’s a good idea for your contracts to specify a shorter period of notice that employees are entitled to if they are dismissed during the probation period. Also think about setting reminders in advance of probation periods ending so that notice can be given to terminate in good time and before the end of the IPE.
Summary
Until the formal consultations commence later in 2025, and draft regulations are published there is still a lot of uncertainty around the proposed changes and how they will work in practice. We’ll keep you updated on any changes as they happen in the coming months.
