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How employers can handle dismissals fairly and avoid unfair dismissal claims

The unpleasant but sometimes necessary process of dismissing an employee is fraught with legal challenges that employers must consider before choosing such a course of action.

Never a decision to be taken lightly, employee dismissals have become more complex in light of the Government’s announcement that employees will gain the right to claim unfair dismissal from day one.

These changes are part of the Employment Rights Bill and will put an end to the two-year rule employers currently enjoy.

At present, employee dismissal carries no risk of an unfair dismissal claim (within reason), if the staff member in question has been employed for less than two years.

The proposed changes are clearly huge for both employers and employees alike, but before employers hit the panic button, these changes will come in no sooner than autumn 2026.

The Government is also consulting on a statutory probationary period designed to give employers time to assess an employee’s suitability.

What is the statutory probationary period?

Under the proposed framework, employers will be able to dismiss staff within a statutory probationary period, likely between three to nine months, through a lighter, less onerous process.

This process will still require employers to:

Discuss performance concerns with employees
Allow a companion to accompany employees to meetings

However, this regime will only apply to dismissals for:

Capability
Conduct
Illegality
Some other substantial reason

Redundancy and restructuring dismissals will not benefit from this lighter process and must comply with the requirements from day one when the Bill is drafted into law.

Somewhat ironically, employees will still need two years of service to qualify for statutory redundancy payments.

Key steps for employers to avoid unfair dismissal claims

With these changes still some time off, employers have plenty of time to prepare.

Preparation for the future also stands employers in good stead for dealing with any claims before the changes for employees who are currently eligible to make an unfair dismissal claim.

Improve recruitment processes

Hiring the right candidate will become even more critical. Employers should:

Tighten interview procedures
Follow up on references wherever possible
Use a detailed induction and training programme to set clear expectations

Review probationary periods

Traditional contractual probationary periods, which usually offer shorter notice periods, may become redundant.

Instead, employers should focus on ensuring their processes align with the new statutory probationary framework.

Create a thorough performance management process

To protect against unfair dismissal or wrongful dismissal claims, employers must have clear, demonstrable evidence to justify dismissals. This includes:

Regular performance reviews carried out by line managers
Clear job descriptions and unambiguous expectations
Detailed training and ongoing support

Document everything

Employers must ensure they keep written records of:

Performance reviews
Discussions around capability or conduct issues
Steps taken to support the employee

Such evidence will be vital to defending against any constructive dismissal claim or allegations of automatic unfair dismissal.

For employers unsure about their dismissal processes or concerned about these upcoming changes, speaking to our team of unfair dismissal solicitors can ensure your policies are legally sound.

If you need advice on dismissal, probationary periods, or handling claims, our experienced team of employment law solicitors is here to help. Contact us today.

Amanda Hyam

Head of Dispute Resolution and Employment

I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years. I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.