A briefing note on the confusion about Day One Rights and Probationary Periods

In the week before the Labour Party conference 2024, media reporting showed a deep confusion about Day One Rights and Probationary Periods. Business had been lobbying for new workers to be put on long periods of probation before they became permanent. The suggestion was that this would water down the commitment to Day One Rights. The Government did agree to a six-month maximum period of probation.

A meeting between the Labour Party and Labour Unions (formerly TULO, consisting of the 11 unions affiliated to the Labour Party) on the Saturday before Labour Party Conference (21 September) appeared to resolve the issue. The six-month maximum period of probation would remain but this would not affect the commitment to Day One Rights. This note explains why that is an entirely appropriate resolution.

Day One rights

In the 2021 New Deal for Working People Labour said this:

.Labour will give all workers day one rights on the job. Labour will also strengthen the protections afforded to all workers by ending the qualifying periods for basic rights. The current arbitrary system leaves workers waiting up to two years to access some basic rights, including protection against some types of unfair dismissal. Labour will end this arbitrary system and scrap qualifying time for basic rights, such as unfair dismissal, sick pay, and parental leave.’

This was a clear description of what the commitment to Day One Rights entailed. We have a number of Day One Rights already. Here are some examples:

• The Working Time Regulations limit maximum hours of work and provide for breaks and apply from the first moment of work;
• The right to the National Minimum/Living Wage applies to the first hour of work and all hours thereafter;
• The worker has a right to a statement of initial employment particulars no later than the beginning of the employment, and the right to an itemised pay statement applies from the first payment of wages;
• The right to a safe place of work applies as soon as the worker starts.

And there are many other rights which, if the worker is dismissed for exercising them, makes the dismissal automatically unfair from Day One, such as: the right not to be discriminated against on prohibited grounds (race, religion, sex, disability, belief, age, trade union membership, etc), or for political beliefs, requesting flexible working, parental etc leave or other legal entitlement, whistleblowing, participating in official industrial action for less than 12 weeks, and certain acts in relation to health and safety.

Of course, some rights kick-in on Day One but cannot be enjoyed in full until enough weeks of employment have accumulated. This is the case, for example, with annual leave.

But what the New Deal was seeking to address was the fact that some rights, at present, require a lengthy qualifying period before the worker becomes entitled to them. This is the case with paid parental leave which requires (generally) at least 26 weeks service. Some qualifying periods are even longer. So, the right to the statutory minimum period of notice (which accumulates at the rate of one week for each year of continuous employment) applies to all those employed for a month or more but there is no entitlement to any notice until the end of the first year of continuous employment. The right to redundancy pay requires at least two years service. And, of particular significance here, is that (save in cases of automatic unfair dismissal – above) the right not to be unfairly dismissed also has a qualifying period of two years.

The New Deal for Working People did not consider that probationary periods had any relevance to Day One Rights so it made no mention of probation.

Probation

Shortly before the election, Labour’s Plan to Make Work Pay: Delivering A New Deal for Workers added a reference to probation in its reiteration of the commitment to:

‘include basic individual rights from day one for all workers, ending the current arbitrary system that leaves workers waiting up to two years to access basic rights of protection against unfair dismissal, parental leave and sick pay. This will not prevent fair dismissal, which includes dismissal for reasons of capability, conduct or redundancy, or probationary periods with fair and transparent rules and processes. We will ensure employers can operate probationary periods to assess new hires. However, the changes will help to ensure that newly hired workers are not fired without reason or cause and will help drive up standards in workplaces’.

This passage makes clear that the existence of a probationary period will not prevent an employer dismissing a worker fairly for a fair reason but neither will it prevent a worker claiming unfair dismissal if she considers the dismissal to be unfair.

We should perhaps note before we come to discuss probation, that we do not make the cynical assumption that the subtle change in language between passage cited from the New Deal and the passage in the Making Work Pay was intended to water down the commitment in the New Deal to ‘ending the qualifying periods for basic rights … such as unfair dismissal, sick pay, and parental leave’ by restricting the removal of qualifying periods only to those particular rights. The New Deal clearly intended the removal of all qualifying periods to the employment rights which are protected by statute. They are, after all, the ‘basic’ employment rights of the UK worker.

Probation is not currently a subject regulated by our employment laws. It is commonly found, of course, in the contracts of new starters. But what its significance is in any particular case will depend on the terms of the particular worker’s contract. There may be a formal process of assessment or merely a discussion with the local supervisor at the end of the period to see if things are working out to the satisfaction of both sides – if not, notice of termination is given or, if continuation is agreed, the worker is put on the permanent payroll. Or, it may be, probation is extended.

The ostensible purpose of probation is, naturally, to give the worker time to see if she likes the job, terms, conditions, pay and prospects sufficiently to carry on, and to allow the employer to assess whether the worker is sufficiently capable and qualified to do the job and not prone to misconduct.

It is not easy to imagine what the proposed maximum six-month period of probation is intended to achieve or what degree of regulation of it is proposed. In European countries, where probation is regulated, procedural requirements are specified for objective assessment of whether relevant probationary criteria have been fulfilled and for dismissal if they are not. Is this to be part of the probation proposal and if so is to be in primary legislation or perhaps the subject of a Code of Practice? We will have to wait and see.

The somewhat arbitrary period of six months has not yet been explained. In the Netherlands a probationary period is not permitted in any contract of six months or less. In France, the usual period of probation is two months for most workers, three months for supervisors and technicians, and four months for executives. In the UK in manufacturing the usual period is three months and in some sectors (e.g. adult care and hospitality) probation is not usual.

The controversy – evading unfair dismissal rights

As highlighted in media coverage, the real issue for the business lobby is not so much the added cost of all rights commencing on Day One, but the prospect of losing the current ability to dismiss a worker and avoid an unfair dismissal claim for, currently two years. What business was therefore lobbying for was the longest possible period of probation during which there would be no (or a significantly diminished) right to unfair dismissal. It is the prospect of unfair dismissal rights kicking in from the moment of hiring that was the target. In short, employment rights from Day One was tolerable – except the right not to be unfairly dismissed.

But this position is unacceptable. Presently, during their first two years of employment, thousands of workers are dismissed unfairly (by an unfair procedure or for an arbitrary or irrational or unsubstantiated reason) with no redress. Indeed, it is well known that many bad employers will not take on a worker for longer than one year and eleven months so as to avoid any risk of an unfair dismissal claim (except in the rare case of an automatically unfair reason).

The conflation of probation with the absence of a right not to be unfairly dismissed is not justifiable. Just because a worker is in a probationary period it does not follow that the employer should be entitled to dismiss them unfairly. The statutory law on unfair dismissal (Employment Rights Act 1996, s.98(2)) already makes it fair to dismiss for, amongst other things, lack of capability or qualifications or for misconduct – the very issues which probation is ostensibly there to assess. Furthermore, the catch-all statutory justification of SOSR (‘some other substantial reason’) is likely to provide another legitimate basis for a dismissal for failure to meet (objectively and fairly assessed) expectations in a probationary period.

The employer is protected

So, if the employer is genuinely dismissing the worker during the probationary period after an appropriate assessment for lack of capability, qualifications, or misconduct, the risk of an unfair dismissal claim succeeding should be negligible.

Thus there is no need for an amendment to unfair dismissal law to include failure to meet the conditions of probation as a fair reason, the statute already provides it.

Furthermore, the employer has the additional protection of the legislation which provides (1996 Act, s98(4)) that whether a dismissal is fair or not is to be decided by a tribunal depending:

‘on whether in the circumstances (including the size and administrative resources of the employer) the employer acted reasonably or unreasonably in treating [its] reason as sufficient for dismissing the employee, and shall be determined in accordance with equity and the substantial merits of the case.’

The Courts have held that this standard is not a matter of the tribunal’s own opinion, but rather that the tribunal’s role is to assess whether a ‘reasonable employer’ would consider the decision to dismiss fell within a range or ‘band of reasonable responses’ of employers.

Without a doubt, in the circumstances of a dismissal during a probationary period, its terms, conditions, and procedures, and an alleged failure by employer or employee to fulfil those requirements, will be taken into account. That is, essentially, why the existence of a probationary period does not diminish the need for Day One rights.

Of course, it is accepted that if a worker can claim unfair dismissal from Day One, employers will, from time to time, have to defend cases which turn out to be unmeritorious. That will be part of a firm’s labour costs. But the risk of being sued is true of everybody’s legal rights in every area of human activity at all times. It is not a reason for protecting possible wrongdoing by totally denying access to the right in question for any arbitrary period of time.

If business had succeeded in persuading the government to accede to suspend unfair dismissal rights for six months, the consequences might have been profound. There would be an increase in five-month fixed term contracts. Seasonal workers would never gain the protection which the New Deal envisaged for all workers. Many workers would be induced to accept zero hours contracts under threat of dismissal within six months. There would be a widespread fear of asserting Day One rights for fear of dismissal without redress during the first six months. Probationary periods would be likely to become universal.

Conclusion

The Labour Party and the unions were right to stand firm on all employment rights being Day One rights regardless of periods of probation inserted by employers into new workers’ contracts. Quite what is now proposed for probationary periods under UK law remains to be seen. But whatever it may be it must not undermine Day One rights.