The Employment Rights Bill (ERB) means there are big changes to employment law on the horizon, though the new law will only start coming into force from 2026 onwards. Lots of detail is missing from the Bill at the moment, so it is too early to start changing policies and procedures.

To help ITC members stay ahead of the changes, Member Matters will focus on different aspects of the Bill from time to time.

Unfair dismissal: day one protection

The Government plans to give employees the right to bring a legal claim for unfair dismissal from day one of their employment.

The situation now

At the moment, an employee needs two years’ continuous service to be eligible to claim for “ordinary” unfair dismissal, though a claim for “automatic” unfair dismissal can be made from day one (covering things like being dismissed for a discriminatory reason, asserting a statutory right, or being a trade union member).

To make a fair dismissal, an employer must ensure it has:

1. A fair reason for sacking the employee, and
2. Followed a fair process when making the decision to dismiss

The fair reasons are: conduct, capability, redundancy, illegality, and some other substantial reason. The minimum requirements of a fair process are set out by Acas (and part of the Ethical Manager contracts).

What the Employment Rights Bill will change

When these parts of the Employment Rights Bill come into force (likely late 2026), an employer will need a fair reason and a fair process when dismissing someone, from day one of their employment.

Most employers will already be careful to follow a fair process and have a fair reason when dismissing an employee, no matter their length of service. ITC’s Ethical Manager contracts already commit employers to this good practice, so many companies will be ahead of the curve.

In future, employers will need to make doubly sure that every dismissal is legally sound. The end of a fixed-term contract counts as a dismissal, so this applies to temporary employees too.

Probationary periods

Currently, probation periods are created by the contract, usually to set a shorter notice period for the first few months of work. Dismissing an employee during their probation is generally simpler because they don’t have two years’ service – not because of the contractual probation itself. This will change under the new law, when unfair dismissal claims will be possible from day one, so employers must make sure they have a fair reason and fair process during the probationary period.

However, the Government also plans a new “initial period of employment”. This will probably be nine months long. During the initial period of employment (IPE), an employer may have a lower standard of procedural fairness to meet when making dismissals for certain reasons. We don’t know the details of this yet, so companies should focus on making sure all dismissals meet the normal required level of fairness.