Employment rights from day one – what might this really mean for employers?

The Labour, Liberal Democrat and Green Parties have all set out some proposals for conferring 'day one' employment rights. 

• Labour's 'Plan to Make Work Pay: Delivering a New Deal for Working People', which the manifesto says would be implemented in full if Labour are elected, promises unfair dismissal, parental leave and sick pay rights from day one of employment (sick pay would be paid on the first day of leave instead of after three waiting days as at present).
• The Liberal Democrats will extend parental leave and pay to the self-employed and make this a day one right.  
• The Green Party would apply all employment rights from day one regardless of employment status.    

Comment

We have considered the parties proposals on family friendly rights and parental leave here. 

In reality many of the most impactful employment rights are already applicable from day one of employment – the national minimum wage, working time rights, and the right not to be discriminated against being perhaps the most significant examples. What the parties are proposing are extensions of that principle to some rights that currently require a qualifying period – the right not to be unfairly dismissed and family friendly rights are the most important examples. 

Even the right not to be unfairly dismissed already applies from the first day in certain cases, eg if the dismissal is because of whistleblowing, pregnancy, or union membership or other protected categories. Recently the right to request flexible working also became a day one right.

However 'ordinary' unfair dismissal claims are the most common type of unfair dismissal claim and allowing such claims from day one will undoubtedly increase the number of claims brought.  The Labour Plan states that employers will still be able to rely on probationary periods where there are fair and transparent rules, but that the changes will ensure that no new hires are dismissed without reason or cause.  In practice, employers will usually have a reason or cause for a dismissal, but when currently applied in the first two years of service, this reason and the process used may not satisfy the requirements for a fair dismissal.

It is likely that to effect this change either the law will need to provide for a maximum probation period in which dismissals can be made without significant processes or extensive reasons (although some of either may be required) or a new fair reason for dismissal will need to be introduced that allows for dismissal during probation periods where certain criteria are satisfied.  Either change will likely introduce significant uncertainty and increase the number of claims faced by employers.  

Many have called for a shortening of the qualifying period for ordinary unfair dismissal to one year, or even six months. This  would be a far simpler change to implement and create less uncertainty.  A day one unfair dismissal right could also have a chilling effect on an employer's desire to hire employees. Instead, they could potentially utilise  agency workers (at additional cost), workers provided via umbrella arrangements (again with some additional cost) or self-employed contractors.  Legislation to prevent these 'work arounds' would be complex.

Reducing the qualifying period for unfair dismissal could be achieved quickly and may be on Labour's list of things to achieve within the first 100 days, although it is likely that some consultation would still be necessary.  However, any legal changes that modify unfair dismissal protection to allow for fair dismissals during probationary periods would require consultation and new legislation, which will take some time.