As the 100-day deadline for Labour’s new legislation approaches, the Financial Times reported last week that UK employers will retain the right to place new employees on a six-month probation period, despite Labour’s election pledge that employees would receive day one rights. Previous reports suggested tensions between Jonathan Reynolds, Business Secretory, who favoured longer probationary periods and Angela Rayner, Deputy Prime Minister, who was advocating for a shorter period before employees could gain full rights.
This announcement, however, comes as little surprise as Reynolds had previously acknowledged the need for a probation period to assess whether a new hire is a suitable fit for the company. Three to six months is the typical length of a probation period and if this period were to be shortened, as proposed by Raynor, this could undercut current arrangements in place by employers. On the other hand, extending the probation period to nine months, as suggested by Reynolds, could conflict with Labour’s commitment to day one rights for employees. It remains unclear how these will interact with each other or whether day one unfair dismissal protections will apply to employees during their probation period.
At present, the Government faces a delicate balancing act between business leaders who have expressed their concerns around the changes and trade unions who are pushing for the proposed employment reforms. When Labour proposed day one rights, they suggested that it would be possible for an employer to dismiss a new hire during their probation period ‘with fair and transparent rules and processes’ to assess a new hire. Although many details are still uncertain, with the 100-day deadline approaching in October 2024, both employers and employees will be eager to understand how the new legislation will impact them.
What are the potential challenges?
Employers argue that a new regime may force them to adopt more rigorous processes to ensure that the dismissal of a new hire can be justified in an employment tribunal. While larger companies may be able to absorb these additional costs, smaller business could face increased financial pressure. This may lead to increased hesitancy in investing in or considering candidates who lack the required qualifications or experience.
What can employers do to prepare?
Employers should proactively review and enhance their recruitment policies and processes to ensure full compliance with the new legislation. Strengthening hiring processes to identify the right candidates from the outset will be crucial. This could involve the use of psychometric testing or additional interviews. Once a new employee is hired, it will be essential to implement formal performance tracking and feedback systems so if there are underperformance concerns, these are properly documented.
Where are we with the other proposed changes?
The right to switch off:
Labour has proposed a right to switch off which will allow employees to disconnect from work outside of their working hours. This proposal will likely follow similar models to those in Ireland and Belgium. Both countries encourage employers to implement a written policy but neither establishes an absolute right to disconnect and importantly not an obligation. Crucially, there are no direct enforcement measures if a company fails to introduce this right. As seen in other European countries, the right to disconnect has made little difference for employees, so it remains to be seen whether Labour will introduce more stringent regulations.
Banning exploitative zero hour contracts:
Initially it was thought that Labour would introduce an outright ban on zero hour contracts, but it now seems that the changes will allow employers to continue to use zero-hour contracts, provided they are not abusive or exploitative. Although still speculative, the new legislation could grant employees the right to a contract which reflects their regular working hours which would be based on a 12-week reference period. While the new changes are unlikely to prohibit fixed-term contracts, it will help prevent the situation where an employer cannot guarantee any work but still expects the employee to be available for any work on offer.
Flexible working the default from day one:
Labour intends to make flexible working the default from day one ‘except where it is not reasonably feasible’. This marks a shift from the current position where there is the right to request flexible working. Although what constitutes as ‘not reasonably feasible’ remains unclear, this change will be a positive step forward in creating more supportive, adaptable workplaces and promoting inclusivity.
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