What is the current situation?
Employees can currently only claim ordinary unfair dismissal if they have at least two years of continuous service with their employer.
There are exceptions for certain dismissals, including those related to discrimination, whistleblowing or health and safety concerns, all of which are already protected from the first day of employment. Being dismissed for one of these reasons is automatically unfair.
If a tribunal upholds a claim of unfair dismissal, it may award the employee compensation, made up of a basic award (calculated by reference to the employee's age, length of service and ‘week's pay’) and a compensatory award (currently capped at the lower of £118,223 or 52 weeks' pay).
So what’s changing and when?
The two-year qualifying period is being removed, meaning that employees will be able to claim ordinary unfair dismissal from the first day of employment.
This means that employers will have to establish a potentially fair reason for dismissal and show that they acted reasonably in all the circumstances (including following a fair process) for every employee, no matter how long they’ve been with the company.
As part of the changes, employers will be able to follow a new ‘light touch’ process in most cases if they wish to dismiss employees during the early stages of employment. This initial period, sometimes referred to as a ‘statutory probationary period’, is expected to be nine months, but this hasn’t been confirmed yet. The ‘light touch’ process will not cover redundancy dismissals or other dismissals which do not relate to the individual (for example for ‘some other substantial reason’ where the reorganisation necessitating the dismissal falls short of redundancy).
There will also be a special compensation regime for employees who are unfairly dismissed during the statutory probationary period (restricted to dismissals that attract the light touch process).
In Autumn 2025, the Government will start consulting businesses on these reforms, including how the light touch process during the statutory probationary period will work in practice. The reforms are expected to take effect in 2027.
What you need to do now
- Review your recruitment procedures to ensure that new hires are well-suited to your organisation. Tighten up your application, interview and pre-employment screening process to ensure thorough due diligence on incoming employees. The costs of getting it wrong will become higher once the rules change.
- Consider your current use of contractual probationary periods, to assess whether you will align these with the new statutory probationary periods and what you may need to improve. Consider in particular:
- their length
- which roles you use them for
- their purpose (for example: ensuring compatibility of a new hire with their role; disapplying certain HR policies; applying a shorter notice period; access to benefits etc.)
- how effective they are currently. Do your managers proactively engage with probationary periods, for example properly managing performance/conduct/attendance during them?
- Get ready to update your performance management/conduct/attendance processes and train your managers. The changes will make it harder for you to dismiss employees early in their service, even potentially where there is a ‘light touch process’ available to establish fairness. Do your managers need upskilling for this?
- Get ready to review the template contract you use for new hires to make it as robust as possible. As we do not yet know the length of the statutory probationary period during which the light touch process will apply, employers may wish to wait to introduce or amend contractual probationary periods. Keep in mind that a separate probationary policy may be needed in due course.
How can Make UK help you
Whether you’re already getting support from us or you’re just starting to explore your options, we’re here to help you plan for the Employment Rights Bill changes and protect your business.
Already getting support from Make UK?
You’ll receive updates from us as key legal changes come in, so you can stay compliant and up to date.
Detailed HR and employment law guidance and template policies and letters can also be found in the HR & Legal Resources section of our website.
If you’ve got questions or need advice, your Make UK legal adviser is on hand to help. They can arrange line manager training and reviews of your HR policies, such as those relating to recruitment, appraisal, performance management and disciplinary matters.
Our HR and legal consultants can also provide hands-on support on any projects as you prepare for these changes. For example, we can help you analyse your training, to make sure it’s adequate in respect of your new hires.
You can also shape future policy. We speak regularly with Government and feed into consultations, using input from businesses like yours.
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You don’t have to face the changes alone. Whether you need quick input or ongoing support, we can help you however works best for your business.
One-off, practical supportIf you want focused help to get ready for the changes:
| Ongoing employment law and HR support
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06/08/2025