(Commonwealth_UK) Under a compromise Labour plan, companies will be permitted to keep new hires on probation for up to six months, diverging from an election pledge to provide employees with “day one rights.” In the lead-up to the July election, Labour committed to implementing essential individual rights from the outset for all workers, including the elimination of the two-year qualifying period for protection against certain forms of unfair dismissal and the one-year wait for parental leave. This promise represented a significant component of Prime Minister Sir Keir Starmer’s ambitious employment reform agenda, which he has characterized as “the biggest leveling up of workers’ rights in a generation.”
Multiple sources within Whitehall have informed the Financial Times that the two ministers overseeing the legislation have reached a consensus on allowing a probation period of up to six months during which employees can be dismissed with greater ease. One source described this as a “decent compromise” following extensive negotiations. The government has opted not to comment on these developments.
The new administration finds itself in a delicate balancing act, navigating the interests of trade unions eager to secure the promised employment reforms and business leaders who express concern over the potential implications of these changes. The government has asserted that the overhaul will not preclude “fair dismissal,” emphasizing the need for “fair and transparent rules and processes” to evaluate new hires.
Business Secretary Jonathan Reynolds had advocated for extended probationary periods, while Deputy Prime Minister Angela Rayner, who maintains strong ties to the trade union movement, argued for a significantly shorter timeframe before employees would receive full rights. Currently, probation periods of three to six months are not codified within UK employment law. Employers contend that the new framework will necessitate more rigorous processes to ensure that any dismissal decisions withstand scrutiny in an employment tribunal.
While larger companies may find the new requirements to be manageable, albeit costly, business groups warn that smaller enterprises could face substantial challenges, potentially becoming more hesitant to hire individuals with atypical backgrounds or qualifications. Matthew Percival, who heads work and skills policy at the CBI business lobby, noted that small businesses are already grappling with pressures on their profitability, suggesting that increased employment costs could hinder their capacity to invest, hire, and grow. A CBI survey indicated that three-quarters of respondents believed the potential for probation decisions to be contested in tribunals would make them more cautious about hiring new staff. Percival emphasized that this concern could be alleviated if the new probation regulations adopted a “light touch” approach.
Reynolds and Rayner have conducted a series of joint meetings with chief executives, unions, and industry lobby groups aimed at clarifying the scope of the reforms and the processes involved. Reynolds dismissed notions of a rift between himself and Rayner, defending the rationale behind probationary periods. “Do we recognize that there needs to be a period during which someone’s performance can be assessed effectively, determining if they are meeting the expectations set during the interview process?” he articulated in a recent interview with The Times.
The British government has pledged to introduce legislation within 100 days following the July general election, with plans to unveil the specifics of the reform package in early October. However, many of the individual policy elements will require a protracted process involving secondary legislation and further consultation before they can be enacted.
