Embracing the new employment era: Dismissing fairly under the ERB

The Employment Rights Bill seeks to bring about seismic change to the employment law landscape, requiring employers to adapt their current practices and policies.

Our latest webinar focused on dismissing fairly under the provisions of the Bill, looking at the introduction of day one unfair dismissal rights, new triggers for collective consultation and changes to the rules on dismissal and re-engagement. The key takeaways from the webinar are highlighted below:

Day one unfair dismissal rights 

• employees will be able to bring claims for unfair dismissal from the first day of their employment when the provisions come into force sometime in 2027
• however, employers will be able to dismiss employees following a “light touch” process during an initial period of employment. Current suggestions are that the initial period will be the first 9 months of employment, but this will be confirmed in regulations
• as well as the light touch process, an employer will also need to show a fair reason for the dismissal. The reasons that can be relied upon during the initial period that would give rise to the light touch process are limited to conduct, capability, statutory ban or some other substantial reason related to the employee
• it may be a different level of compensation is available to employees dismissed unfairly during the initial period, but again the detail is to be set out in further regulation

Increase to time limit for tribunal claims

• also proposed under the Bill is the extension of the time limit for presenting a claim in the employment tribunal from 3 to 6 months for all claims except contract claims
• it is expected that this change will come into force in October 2026.new trigger for collective consultation
• a new trigger is proposed to capture redundancies across a whole organisation. This could be based on a set number of employees placed at risk of redundancy across the organisation or where a set percentage of the workforce is placed at risk. The exact details of the trigger will be set out in regulations
• again, it is likely that this will not come into force until sometime in 2027
• alongside this, there is also a planned increase to the protective award from 90 to 180 days gross pay per employee where an employer fails to meet their collective consultation obligations. This change is planned for April 2026

What changes are proposed in relation to dismissal and re-engagement? 

• the Employment Rights Bill seeks to limit an employer’s ability to dismiss and re-engage employees as a way of varying contracts of employment
• where there is a restricted variation proposed, any dismissal will be automatically unfair unless the employer can demonstrate that the variation is necessary due to financial difficulties which affect the employer’s ability to continue as a going concern, and the variation cannot be reasonably avoided
• even where the proposed change is not a restricted variation, the employer will be expected to go through a fair process and the Bill sets out certain steps which the employer will be expected to take including consulting and considering alternatives

What should employers be doing now?

• review if any large-scale reorganisations are likely to be required in the near future and implement these before April 2026 where possible
• consider having a standing body of elected representatives in place if collective consultation is likely to be required on a regular basis across the organisation
• review your recruitment practices and dismissal procedures to ensure these are robust
• review your performance management practices and procedures and consider if these need updating in light of the new measures
• consider whether you have a probationary period in place already and how this is implemented
• stay alert for any further changes to the Bill and respond to the consultations when published
• train managers on the upcoming changes

Watch the recording