Six-month unfair dismissal rights: Greater protection or greater uncertainty?
4 Minute Read
Since 2012, employees have needed to be employed for 2 years (actually 103 weeks) before being able to claim for ordinary Unfair Dismissal.
From 1 January 2027, that period will drop from 2 years to 6 months. It is a big change. Many think workers will be better off. But there are some less obvious consequences and with a sting in the tail.
With a 2 year period before workers get Unfair Dismissal rights, employers can take time to really see whether a person is a good fit in the job. It is just a lengthy and thorough 2 year probation period. You can get to know a person pretty well over that length of time.
6 months is far shorter. In fact, employers are not going to wait the full 6 months to see if a worker is a good fit. The thinking is that decisions will be made around months 4 and 5 of someone’s employment.
So, it could be that just 5 months into a new job, a worker is let go.
And that could happen time after time.
For young workers, new to the jobs market, this could be a huge problem. They may never get any proper experience in the job.
How stressful will that be? Workers may feel that they have barely got started and they are being intensely monitored to see if they are worth keeping beyond month 5.
You know what they say: a watched pot, never boils. If you are being intensely monitored, will the stress of that make it more likely that you will not be at your best, or that you may make mistakes?
How does this work with getting some financial independence, or making any longer term plans?
For those who are kept on after 6 months, yes, they get Unfair Dismissal rights sooner but, even so, if they are dismissed in the first couple of years, will it be worth making a claim? Well, hardly. Let’s see why.
On average, to be legally represented at a Tribunal for Unfair Dismissal will cost around £10,000 to £15,000, based on a 2 to 3 day hearing, more if a hearing is longer than that.
You do not get your costs back if you win in the Tribunal. That is worth saying again – you do not get your costs back. This means, a claim would have to be worth more than the costs, and quite a bit more, to make it worthwhile taking the risk.
If you have been employed for, say, 2 years, a Basic Award is 2 weeks’ gross pay and it is capped at £751 per week. So, if a worker is paid £28,000 a year, 2 weeks’ pay is (2 x £538.46) = £1.076.92.
It currently takes about 18 months to get to a hearing at the Tribunal. People cannot afford to not be earning and so, if the dismissed person spent about 3 months looking for work, their loss of net pay would be about £6,000. Add in the Basic Award and we get a total figure of about £7,000.
Now, would you pay over £10,000 in costs to have a shot at getting £7,000, or so? No, you would not. It is unlikely a union would fund such a claim (‘sorry, it’s just not worth it’). The numbers do not add up.
The upshot of this is that the new 6 months’ rule could lead to a larger number of younger workers, moving between jobs lasting only 5 months, or so. Never getting an opportunity to have experience in a role. At least under the current rules, an employer can take more of a chance with an employee and allow them time, up to 2 years of time, to develop into a role and show potential.
Sadly, if the predictions are correct, those days are over and periods of intense monitoring or ‘super-probation’ may be become the new normal.
The unintended consequence, may also be that when recruiting, employers may ‘play safe’ and hire people with experience. This would also disadvantage younger candidates fresh from schools, colleges and even universities.
Maybe the ‘5 monther’ will be as common in years to come as the ‘Gen Z’.
Is it fair? Maybe not. You may wonder if it really was fully thought through.
By Mike Robinson, employment solicitor.
Author
Mike Robinson
Mike is a senior solicitor at Askews. He advises on employment law and has 20+ years’ experience in this field. Mike is a member of the Employment Lawyers Association.