In a significant about-turn, the UK government has announced it will not be proceeding with its plans to introduce day-one unfair dismissal rights and will instead be introducing a six-month qualifying period for unfair dismissal claims. In its press release, it said it was making these changes to ensure the Employment Rights Bill receives Royal Assent and it can keep to its published delivery timeline for the other changes in the Bill.
Employers will no doubt be breathing a huge sigh of relief, as the government’s plans for a statutory probationary period and a new “light-touch” procedure for dismissals during the first nine to 12 months of employment had looked horribly complicated (some might say unworkable) – and we hadn’t even seen the full details of them yet! A six-month qualifying period will inevitably lead to an increase in unfair dismissal claims, but at least employers will not be grappling with a whole new test for demonstrating a fair dismissal.
But it is not quite all good news! Buried in the press release, the government also states that the compensation cap for unfair dismissal will be “lifted”. Does this mean simply raised or removed altogether? As things currently stand, the cap on the compensatory award for “ordinary” unfair dismissal is the lower of the statutory limit (currently £118,223) and 52 weeks’ pay of the individual concerned. There are no further details at this stage, but some commentators are suggesting that the statutory upper limit will remain, but the cap of 52 weeks’ pay will be removed.
The Employment Rights Bill is due to come back before the House of Commons on 8 December and will presumably now pass smoothly through the House of Lords to receive Royal Assent.
Upcoming Webinar: The New Employment Rights Act Is Almost Here – What UK Employers Need to Know
Find out more about these changes, as well as all the other key provisions that will be in the new Employment Rights Act, at our webinar on Thursday 11 December. Register here.
