Day one rights to unfair dismissal were among the more controversial proposals set out in the Employment Rights Bill (now the Employment Rights Act 2025) and have been the topic of much debate in the extensive game of Parliamentary ping pong that has now, finally, come to an end.

During the course of the Bill's passage the day one right has become a right with a six month qualification period and the change is expected to come in from the beginning of 2027.

Currently the two-year qualifying period remains in place, unless the dismissal is automatically unfair, or it relates to the employee's political beliefs or affiliation.

A day one right?

The original plan was for the current two-year qualifying period to be swept away under the Act and the right not to be unfairly dismissed was going to be in place from day one of employment. The Act allows employers to operate probationary periods during which employees can be dismissed more easily for performance after following a "lighter-touch" process. As the day one right will become a six-month qualification period, the proposed statutory probationary period, and the consultation to thrash out the detail of the way in which this period will operate, has been dropped.

The probationary period

Whilst employers won't be having to contend with a statutory "lighter-touch" dismissal process as initially thought, a six month qualification period for the right to claim unfair dismissal will definitely place probationary periods in the spot light. It will be important to deal effectively with any issues which may arise during this period to minimise the risk of unfair dismissal claims further down the line.

The compensatory award

Currently the compensatory award for an unfair dismissal claim is based on a statutory cap (at the moment this is £188,233 but it gets uprated every year) or 52 weeks' salary, whichever is the lower amount.

A major last-minute change to the Bill was the proposed lifting of the cap on compensatory awards altogether. This was rejected by the House of Lords on the 10th of December, but the government stuck by its guns and when the issue went back to the Lords on the 16th of December agreement was reached and the Bill was finally passed.

The government has promised to publish an impact assessment on the Employment Rights Act which will include an assessment on the impact of the lifted compensatory award cap. It's worth bearing in mind though that this won't be a consultation and the Act states clearly that the cap will go.

Written reasons for dismissal

Currently there is a two-year qualifying period for the right to written reasons for dismissal on request. Presumably, under the new law, employees will qualify for this right after completing six-months' service.

Practical points

Whilst implementation is still some time away (the beginning of 2027), there are several steps HR teams should take now:

• Pay attention to your recruitment processes to ensure that unsuitable candidates for the role on offer are weeded out to avoid problems down the line.
• If you don't already have a probation period, consider introducing one so that managers get used to managing probation effectively.
• Actively manage employees during the probationary period so that any problems can be addressed during this time and before six months' service has been reached.
• Invest time in training managers to deal with the probationary period confidently and to handle performance issues effectively within the six-month window.