The Tricky Tightrope of Unfair Dismissal

The Employment Rights Bill 2025 is proving to have a number of issues that are of concern to businesses. It appears that the primary disquiet with the Bill is the introduction of the "day-one" right to claim unfair dismissal, as opposed to the present two-year qualifying period of employment. This may significantly alter how employers manage new staff and also brings with it the potential for litigation with the costs and risk associated with the same. 

The statutory probationary period will vary, with the introduction of an “initial period of employment”. The length of time has not been confirmed but the Government appears to favour a nine-month initial or qualifying period of employment. This would be a substantial change, if implemented.

Unfair dismissal arises when an employer has no fair reason to dismiss an employee. The Employment Rights Act 1996 (‘ERA’), read in conjunction with the statutory codes of practice included in the Advisory Conciliation and Arbitration Service (ACAS), initially introduced the right to claim unfair dismissal in an attempt to protect employees from arbitrary or unjust termination. The concept ensures that an employee’s contract cannot be abruptly ended without due process and a fair reason. Many employers dismiss employees without following the ACAS Code of Practice, or indeed their own internal policy and procedures, and fall foul to potential employment claims before the Employment Tribunal.

The Act is now to be amended by the incoming Employment Rights Bill 2025 which is in its final stages before receiving parliamentary approval, after which it will receive Royal Assent, the point at which the Bill officially becomes an Act of Parliament and eventually pass into law. The Bill has returned to the House of Commons for consideration of the latest amendments made by the House of Lords. Royal Assent is expected sometime in late 2025.

There is ongoing disagreement, particularly regarding the proposal for 'day one' protection from unfair dismissal (the Lords are insisting on a six-month qualifying period, which the Commons has repeatedly rejected). The Government appears to prefer a non-month qualifying period. This would mean claims for the concept of unfair dismissal, instead of being able to be invoked after two years of employment, may become a day-one right.

Nevertheless, changes to the qualifying period is likely to be implemented much later (possibly 2027) than some other rights (such as the repeal of most of the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023) expected soon after Royal Assent or other changes expected in April 2026 (such as statutory sick pay reforms, 'day one' right to paternity leave and unpaid parental leave, and Fair Work Agency body establishment).

Should a situation arise where the behaviour of an employee becomes problematic and the employer is considering dismissal, regardless of the reason, the employer should follow the strict guidelines relating to dismissal or there may be a potential for the dismissal to be considered to be unfair. It is very much likely that businesses will need to update their internal policies and procedures in line with what will be drastic changes to the status quo on these issues. There is rarely a need to dismiss an employee instantly on the spot following an incident, unless gross misconduct can be demonstrated and nevertheless, will need to meet a threshold.

Cameron Jack, a paralegal, commented “an employer is strongly advised to have internal policies and procedures that includes an outline of what is expected of employees in terms of behaviour and performance and sets out the standard of behaviour in the workplace, as well as what happens if that level of conduct is breached and an investigation, or disciplinary action, must be undertaken.” Cameron further pointed out “it is important for employees, and employers, to follow this process carefully, as any breach will undermine the disciplinary action and could cause further problems down the line, including a grievance being filed by the employee if they have been treated unreasonably. It is further important for employers to recognise that action can be proportionate, and alternatives to dismissal may be considered.”

Policies may include:

• Standards of expertise;
• Discrimination and sexual harassment policies;
• When it is appropriate to use company assets;
• If and when the use of social media can be applied;
• Communication – how, when and to whom;
• Reporting misconduct;
• Gross misconduct should be defined;
• Disciplinary procedures.

Initially, the employer should issue a clear warning that the employee’s conduct is inappropriate. It is often appropriate to deal with matters informally, if they are relatively minor and capable of resolution. However, if they are more serious, a meeting should be set up and the employee should be accompanied in the meeting. Employers must keep employees informed, and up to date with the process. This will give the employee an opportunity to respond to any allegations.  Fair reasons for dismissal may be:

• Capability – if the employee is unable to perform the duties attached to the job they have been employed to carry out.
• The employee’s conduct is unacceptable.
• The employee is being made redundant (separately, the correct and appropriate redundancy process must be followed considering the number of employees in a pool for redundancy).
• An employee loses a qualification required to perform their job, for example a lorry driver who has their driving licence rescinded.
• Some other reason of gross misconduct.

Below are some potentially unfair dismissal reasons:

• A discriminatory reason, such as one based on age, gender, or race.
• Instant dismissal or minimal notice without a valid reason.
• The employer fails to follow an acceptable disciplinary process.
• Pregnancy or issues related to maternity or paternity leave.
• Trade Union membership.
• The employee raises health and safety concerns.
• Whistle-blowing.

Even if there is a fair reason, it may not be sufficiently substantial in certain cases or if due procedure was not carried out correctly, this may negate the otherwise fair dismissal.  It is possible that alternatives to dismissal could be offered, including a written warning, Performance Improvement Plan, or retraining on a matter linked to the potential dismissal.

The employment lawyers at Giambrone and Partners strongly advise employers that considerable care is taken not to unfairly dismiss an employee as the awards that are given by the Tribunal can be substantial as the following examples testify:

• A teacher won £137,112 for discrimination and harassment due to her disability, after being told she “let colleagues down” by taking sick leave for an operation.
• In one matter, despite an employee calling a manager and director, what would be likely to be consider, a rude name in meeting was awarded her £15,042.81 in compensation and £14,087 towards her legal fees.  This was despite the contract stating she could be fired for “the provocative use of insulting or abusive language”. The Tribunal ruled that the company had failed to follow proper disciplinary procedures and that calling her bosses a rude name was insufficient to fire her on the spot. The judge said this one-off comment did not amount to gross misconduct or misconduct so serious to justify summary dismissal.

The Employment Rights Bill 2025 introduces the controversial "day-one" right to claim unfair dismissal, shifting the risk profile for employers and raising concerns about potential litigation.

Regardless of the final length of the statutory probationary period, businesses must prepare for this change by strengthening internal procedures. Compliance hinges on documented, fair dismissals and strict adherence to the ACAS Code of Practice to manage the increased risk under the new law.

Cameron Jack  studied both English law and Scots law and graduated from the University of Dundee.  He has considerable expertise in both family law and employment law are is also part of the LGBT+ team at Giambrone & Partners LLP. 

He advises on a wide range of family law, including complex contentious matters. He specialises, in particular, in divorce and financial remedy proceedings, assisting clients with financial agreements and child arrangements. Cameron assists international clients on their family affairs. He also often assists LGBT+ clients and is empathic to the personal circumstances of clients.

Cameron has also advised in high-value financial cases where he has assisted in resolving complicated financial disputes involving assets in family businesses and trusts and is well-regarded by clients.

Cameron’s expertise also extends to employment law where he specialises in mediation and dispute resolution. He works tirelessly to resolve complex situations for his clients working tirelessly to resolve complex situations for his clients.

Should you wish to know more about the way the Employment Rights Bill will impact on your business please click here