This has raised concerns in the recruitment sector and prompted many questions to our legal helpdesk, regarding the potential impact on internal staff, client hires, rebates, and supply arrangements.

What is changing?

Currently, the right to claim unfair dismissal only applies, with some very limited exceptions, to employees who have completed 2 years of service.

This right is proposed to be extended to all employees from day one of employment. It has been suggested that this right may be subject to probationary periods, but we would assume there will be limitations on how this would operate. Employers will, in any case, still be entitled to terminate employment where there is a fair reason, for example, in cases of redundancy or for reasons related to an employee’s conduct or performance, and the decision to dismiss is reasonable in the circumstances.

Impact on recruitment

With respect to internal staff, these changes will mean that any dismissal may result in a claim for unfair dismissal, irrespective of length of service, subject to any potential exclusions in respect of probationary periods. It will therefore be important, to have clearly set out probationary terms and expectations. Businesses should have appropriate processes in place to monitor and assess performance and conduct to ensure that any issues may be addressed at an early stage.   

Hirer clients will be in a similar position, and this may result in more decisions to terminate within the probationary period. This could have an impact as it may result in a higher level of terminations within a rebate period, with more rebates becoming payable.

There could be an upside, in that this encourages more supply work. A client who is unsure might want to ‘try before they buy’ and therefore look at temp to perm arrangements. This may create opportunities for supply and transfer fees.

Next steps

The bill is yet to be published, so we do not have the details, in particular, in respect of how any exceptions related to probationary periods may work. We should hear more in the coming weeks and will provide subsequent updates when available.

A key consideration for recruitment businesses is to ensure that all contracts are appropriate and kept up to date. Lawspeed’s ‘Contract Maintenance’ service provides clients peace of mind, as this gives automatic updates to contracts reflecting all relevant changes. In addition, it is always beneficial to get advice, contractual or compliance, as early as possible, especially in relation to dismissals and claims.

For more information, or expert advice on any recruitment or employment law matter, please contact us on 01273 236 236 or email us at info@lawspeed.com.