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Companies will be able to keep new hires on probation for up to six months under a compromise Labour plan despite an election pledge to give employees “day one rights”.
In the run-up to July’s election, Labour promised to introduce basic individual rights from day one for all workers — scrapping the existing two-year qualifying period for protection against some forms of unfair dismissal and a one-year wait for parental leave.
The promise was one of the most controversial elements of sweeping employment reforms that prime minister Sir Keir Starmer has called “the biggest levelling up of workers’ rights in a generation”.
But multiple Whitehall figures told the Financial Times that the two ministers steering the legislation had settled on a probation period of up to six months when employees could be dismissed more easily. “It’s a decent compromise after a lot of back and forth,” said one.
The government refused to comment.
The new administration is walking a tightrope between trade unions, which are determined to secure the promised employment reforms, and business leaders, who are worried about some of the changes.
It has said the overhaul will not prevent “fair dismissal”, including the use of probationary periods “with fair and transparent rules and processes” to assess new hires.
Jonathan Reynolds, business secretary, had favoured allowing longer probationary periods, while deputy prime minister Angela Rayner — who has strong links to the trade unions — had wanted a much shorter length of time before workers would get their full rights.
Probation periods, which typically last three to six months, play no part in UK employment law at present. Employers argue that the new regime will require them to introduce much more rigorous processes to ensure that any decision to dismiss a new hire will stand up to scrutiny in an employment tribunal.
For large companies, this is potentially more costly but manageable, but business groups say smaller firms will struggle and may be more reluctant to hire staff with atypical backgrounds or qualifications.
Matthew Percival, who leads policy on work and skills at the CBI business lobby, said small businesses in particular were “already struggling to keep up with the pressure on their bottom lines” and that higher employment costs “will inhibit their ability to invest, hire and grow”.
Three-quarters of respondents to a CBI survey said the possibility of probation decisions being challenged at a tribunal would make them more cautious of taking on new staff, but Percival said this could be avoided if new rules on probation required “only a light touch approach”.
Rayner and Reynolds have held a series of joint meetings with chief executives, unions and lobby groups meant to reassure them and explain the extent of the reforms and how they will work.
Reynolds this week dismissed the idea of a rift with Rayner and defended the idea of probationary periods: “Do we recognise there needs to be a period after which someone has started work where you’re assessing effectively, ‘is this working’, are they living up to the promise they had in the interview?” he told The Times.
The British government has promised to produce legislation within 100 days of the July general election and is expected to set out the details of the package in early October. However, many of the individual policies will have to go through a lengthy process involving secondary legislation and more consultation.
