The UK government’s proposed Employment Rights Bill could bring major changes to how businesses approach hiring and managing people — particularly the proposal to give employees the right to claim unfair dismissal from their first day of employment.
For many small businesses, this would mark a big shift from the current setup, where most employees need two years of continuous service before they’re protected under unfair dismissal rules. While the bill is still going through Parliament, now is the time to prepare — and to think carefully about how early employment decisions are made and managed.
Here’s what this potential change could mean for you, and how your business can respond with confidence.
What’s Changing?
At the moment, employees in the UK can only bring a claim for unfair dismissal after two years of continuous service — unless the dismissal relates to an automatically unfair reason (such as discrimination, whistleblowing, or pregnancy).
Under the proposed Employment Rights Bill, this qualifying period could be removed altogether. That means all employees could be legally protected from unfair dismissal from Day One of their employment with you.
Why This Matters
This change would reduce an employer’s flexibility to let someone go in the early stages of employment without legal risk. It would mean:
- A higher likelihood of legal claims if dismissals aren’t handled properly
- More pressure to get hiring, onboarding, and early-stage management right
- The need for clearer processes, better documentation, and more confident people management
The good news? With the right systems in place, these risks are entirely manageable — and could even lead to better outcomes for your team overall.
Probationary Periods will be crucial
If unfair dismissal protection starts on Day One, probationary periods will become more than just a formality. The new law may require a specific length of probationary period (six or nine months). Even if an employee does not pass the probationary period, there are likely to be legal obligations around terminating the employment, which will involve having regular feedback and proper documentation.
This includes:
- Setting out clear expectations from the start
- Holding regular review meetings during the probation period
- Providing honest, constructive feedback
- Documenting any concerns or support offered
Probation should be a structured process — not something that’s assumed to “just work out.”
Recruitment Needs to Be Even More Robust
The cost of a bad hire will go up if dismissing someone becomes more complex from the outset. That’s why effective recruitment processes will be really important.
Consider the following:
- Proper job descriptions so there are no surprises for new employees
- Clearly outlining the role and expectations in the job adverts
- Robust pre-employment checks
- Assessing not just the ability to do the job, but the right attitude and values
This will help you to make better recruitment decisions and avoid a potentially costly exit further down the line.
If you need some more advice on recruitment, have a look at our blog post last year about recruitment strategy: https://www.heartfelthr.com/a-recruitment-strategy-why-would-i-need-one/
Managing Ongoing Performance Matters
Just because someone passes their probationary period, that doesn’t you can stop managing their performance. In fact, the probationary period is just the first stage of the performance process. You want their good start to continue into the rest of their working life with you.
See our blog from last year about the performance management cycle https://www.heartfelthr.com/understanding-how-to-manage-employee-performance/
Managing Conflict and Workplace Relationships Will Be Critical
Workplace conflict, even if low-level, can easily become a legal issue and it can certainly affect productivity and employee engagement. If protection from unfair dismissal is in place from Day One, employers will need to take early conflict resolution more seriously and have robust processes in place to nip it in the bud.
This includes:
- Training managers to handle interpersonal issues constructively
- Encouraging open communication within teams
- Having clear, accessible grievance and disciplinary processes
- Consider using workplace mediation
- Have robust policies to deal with discrimination, harassment and bullying
- Fostering a respectful, inclusive workplace culture
Managing people well isn’t just about performance — it’s about trust and building relationships too.
Contracts and Policies Need a Review
This is the time to review your employment contracts, policies, and procedures, especially if you haven’t updated them recently. Make sure:
- Probationary periods and ongoing performance management processes are clear and contractually sound
- Disciplinary and grievance policies are clear and accessible to everyone
- Expectations around conduct, attendance, and performance are spelled out clearly
- Managers understand how to apply these policies consistently
Balancing Compliance with a Positive Culture
While this proposed change may seem like more red tape, it can also be a catalyst for stronger, kinder and more robust people practices. Building a fair, respectful, and well-managed workplace is good for:
- Reducing absence and turnover
- Improving employee trust and engagement
- Attracting great talent
- Reducing “people issues” in the long term
Final Thoughts
The proposed move to Day One unfair dismissal rights is a big change, but it’s also an opportunity — a chance for businesses to strengthen their recruitment, induction and onboarding, and management practices.
At Heartfelt HR we help small businesses prepare for changes like this with clarity, compassion, and confidence – putting your people first. Whether you need help reviewing your contracts, tightening up your recruitment and probationary processes, or supporting your managers through tough conversations, we’re here to help.
If you’d like to chat about what this change could mean for your business, get in touch — we’d love to hear from you.
