Just as the Employment Rights Bill seemed stuck in parliamentary ping pong, a dramatic U-turn on the government’s manifesto promise of day one unfair dismissal rights looks set to smooth its passage to the statute book. A compromise of a 6 month qualifying period, coupled with a “lifting” of the compensation cap, significantly changes the legislative landscape.
A cornerstone of the Employment Rights Bill was Labour’s manifesto commitment to day one unfair dismissal rights. However, with the House of Lords digging its heels in over an amendment that would impose a six-month qualifying period, the government has changed course.
It announced on 27 November that rather than removing the qualifying period entirely, it would instead reduce it from two years to six months in accordance with the Lords proposal. In a step likely to minimise backbench backlash, this has been agreed with unions and business representatives. However, it then also emerged that the government was planning to “lift” the cap on unfair dismissal compensation – without providing any details of what exactly it meant by this.
The shift on day one rights will be a welcome change for employers who will now be able to assess how a new employee is getting on, and operate a probationary period within the usual confines of between three and six months, without risking an (ordinary) unfair dismissal claim if this ends in termination. It also allows employers to recruit people on short, fixed term contracts...
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