Six months qualifying period for Unfair Dismissal
The Government has announced the scrapping of the proposed Day One right to claim unfair dismissal, as set out in the Employment Rights Bill.
After discussions with trade unions and business representatives, the Government has decided that it will reduce the current two years’ continuous service eligibility requirement to claim ordinary unfair dismissal, to six months. There will still be Day One protection for most claims for dismissals on automatically unfair grounds (eg whistleblowing, amongst other grounds) as is currently the case.
A six-month qualifying period to make a claim for unfair dismissal, is going to be much simpler for employers and employees to navigate than the original Day One right proposal which had been accompanied by the ability to dismiss fairly in an “initial” period of employment, by following a “light touch” procedure.
A six-month qualifying period should give employers more comfort to recruit staff but will inevitably mean that employers will need to be much more focussed on ensuring that the new recruit is right for the job, in the early months of employment. Currently, employers have a buffer of the two-year qualifying period, before unfair dismissal rights accrue which can mean that employers do not always make timely decisions about an employee’s suitability for the role.
Compensation cap for unfair dismissal to be lifted
A further change is that the compensation cap for unfair dismissal will be lifted. Currently the compensatory award for unfair dismissal is one year’s gross pay or £118,223, whichever is lower (the cap does not apply to some automatically unfair dismissal claims).
It is not yet clear whether this change will mean removing the one year’s gross pay cap or the upper cap of £118,223 although it seems likely that the cap of £118,223 will remain. No doubt, clarification will be provided by the Government, in due course.
The change to unfair dismissal rights had been expected to take effect in 2027 but this now may happen as early as 2026. We await clarity on this from the Government.
The above does not constitute legal advice.
If you would like to discuss any employment matter contact, please Julia Woodhouse at 01926 831231 or jhw@blytheliggins.co.uk.
Julia is an Employment Solicitor based in Leamington Spa and advises clients across Leamington Spa, Warwick, Kenilworth, Coventry, Rugby, Nuneaton, Atherstone and further afield.
