HR Services Scotland | Client update
Key development: Day-one unfair dismissal rights
The Government has advised that it will drop plans for day-one unfair dismissal rights.
An alternative proposal of a 9-month probation period has also been dropped by the Government.
Instead, the Government will introduce primary legislation to reduce the qualifying period from two years to six months. The Government will also introduce a mechanism to ensure that future changes to the qualifying period can only be made through primary legislation, not by regulation. This strengthens protections against future reversals by subsequent Governments.
This change to the Government’s manifesto policy is the consequence of behind-the-scenes negotiations involving the Government, trade unions, employer organisations, and amendments suggested by the House of Commons.
Compensation cap for unfair dismissal
As part of the compromise, the Government announced that the compensation cap for unfair dismissal will be lifted.
Importantly, it is not yet clear whether this means this will mean the removal of a limit for unfair dismissal awards, or if a change is to be made to one of the two component parts of the either/or award, which is the lower of 52 weeks’ pay or the amount of the regulatory limit (revised annually).
Other outstanding issue: Zero hours contracts
There has been no Government announcement addressing the House of Lords objection regarding the administrative burden the proposed procedure would place on businesses, particularly SMEs.
The Lords highlighted
What happens next?
The Bill will return to the House of Commons on 8 December. It is expected to become law before Christmas.
Practical implications for your business:
Monitor developments on zero hours contracts, as any forthcoming provisions could impact scheduling, staffing flexibility, and administrative processes.
Prepare internal communications and HR policy updates to reflect the potential changes, ensuring compliance once the Bill progresses.
