Day One employment rights – what will they mean for your business?

Big changes are coming to employment law – and they could affect how you hire, manage, and dismiss staff. One of the flagship pieces of legislation of the Starmer government, The  Employment Rights Bill, is currently working its way through Parliament.  The government has published a timetable for implementation of the various new rights in the Bill which commences from the day the new bill is passed and stretches to October 2027.  However, it’s worth understanding the implications of one of the key elements – Day One employment rights – for your business now, so you can plan for compliance and to take the eventual change in law in your stride. Employment lawyer Kate Lawson, of Element Law, outlines how it will impact businesses.

What are the current rules?

As things stand, most employees need to have worked for you for at least two years before they can bring a claim for unfair dismissal – this is often referred to as “ordinary unfair dismissal.” However, the exact timing can vary slightly depending on whether notice is given or not.

There are exceptions to this rule. Some types of dismissal are considered “automatically unfair,” and in these cases, there’s no minimum length of service required. These include situations where an employee is dismissed for whistleblowing, being pregnant, raising health and safety concerns, or asserting a legal right—such as asking for the minimum wage or holiday pay.

Another area to be aware of is “constructive dismissal.” This is when an employee resigns because they feel they’ve been forced out due to a serious breach of contract – such as not being paid or being bullied. The same two-year qualifying period usually applies here too.

How will Day One employment rights change things?  

One of the biggest shake-ups in the new Employment Rights Bill is the removal of the two-year service requirement before an employee can claim unfair dismissal. If the Bill becomes law, employees will be protected from unfair dismissal from their very first day on the job.  This change is proposed to take effect in either April or October 2027.

This will be a major shift for employers. It means you’ll need to be confident that your recruitment, onboarding, and performance management processes are watertight from day one – because your team will have full employment rights from the moment they start.

It’s worth noting that some protections have always applied from day one. These include protection from discrimination or harassment based on any of the nine protected characteristics: sex, race, age, disability, sexual orientation, gender reassignment, religion or belief, marital or civil partnership status, and pregnancy or maternity status.

Another important change in the Bill is the extension of the time limit for bringing a claim to an employment tribunal. Currently, employees have three months to make a claim – this will be extended to six months, giving them double the time to take action.

What are the qualifications to Day One employment rights? 

The government is proposing a new approach to unfair dismissal rights. While employees will technically have the right to claim unfair dismissal from their first day, there is likely to be a key caveat: during an initial “probationary period,” employers may be allowed to follow a simpler, more flexible dismissal process.

This lighter-touch approach is expected to apply for the first nine months of employment. However, it won’t apply to redundancy situations – employees will still have full protection from day one if they’re being made redundant.

There’s also a suggestion that tribunals could be given the power to reduce compensation for unfair dismissals that happen during this probationary period. At the moment, compensation for unfair dismissal can be up to the lower of one year’s gross salary or £118,223.

The finer details of how this will work in practice are still being developed, and the government plans to consult on the specifics  over the next few months.

In short, while the right to claim unfair dismissal will start from day one, employers may have more flexibility in how they manage dismissals during the early months of employment, unless it’s a redundancy.

What are the changes to the rights of parents?

The Employment Rights Bill is also set to introduce new day-one rights for working parents, removing the current length-of-service requirements for several types of family-related leave. These changes are designed to give employees more immediate support during key life events – something small business owners will need to factor into their HR planning:

• Paternity leave: Eligible employees will be entitled to two weeks of paternity leave from their first day of employment. Currently, this right only kicks in after 26 weeks of service.
• Parental leave: The right to take up to 18 weeks of unpaid leave to care for a child under 18 will also become a day-one entitlement. At the moment, employees need to have worked for you for at least a year to qualify.
• Bereavement leave: The current right to two weeks’ leave following the death of a child under 18 or a stillbirth will be broadened. The new rules will allow for “bereavement leave” (often called compassionate leave) to cover the loss of a wider group of close family members, and this too will be available from day one.

What do you need to know about flexible working and sick pay?

Since April 2024, employees have had the legal right to request flexible working from their very first day on the job, but employers are entitled to refuse these for one of the reasons set out in the legislation, without an employee or tribunal being able to question the reasonableness of this judgment.

While the government had previously suggested it would go much further in new legislation – effectively to make  flexible working the default, unless it was “not reasonably feasible” – this isn’t in fact reflected in the Employment Rights Bill. Under the current Bill, employees will still only have the right to request flexible working, not an automatic right to work flexibly.

That said, the changes proposed under the Employment Rights Bill will make it harder for employers to turn down these requests. This is because the Bill will introduce a test of reasonableness where an employer refuses a flexible working request. This change is expected to lead to more tribunal claims where requests are refused, so it’s important to handle them carefully and document your reasoning.

There’s also a change to Statutory Sick Pay (SSP). Currently, SSP only kicks in after three waiting days. Under the new proposals, SSP will be payable from the first day of sickness absence, giving employees immediate financial support and removing the current delay.

These changes will come into effect over the next 2 years, once the government has completed its consultation, passed the necessary regulations, and formally brought the new law into force. However, astute business owners and managers will start reviewing recruitment, onboarding and performance management processes now to ensure they are in the best possible position to take the legislative changes in their stride when they come into effect.

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MEET THE EXPERT

The director of Element Law, Kate Lawson  is a specialist employment law and HR solicitor for businesses and employees across the country. She also provides training for HR professionals, business leaders and teams through bespoke in-person courses and webinars.