How new unfair dismissal rules will impact employers

In this episode of the Employment Law Pod, Andrew Whiteaker is joined by Will Morris from Profectus Recruitment to unpack one of the most significant upcoming changes in UK employment law. With the Employment Rights Act introducing a new six month qualifying period for unfair dismissal claims and removing the compensation cap, businesses are entering a period of real change and increased risk.

Andy explains how the shift from two years to six months will reshape decision making for employers, particularly during the early stages of employment. The conversation explores how this change raises the stakes for getting recruitment and onboarding right from day one, and why waiting until the end of a probation period could create unintended legal exposure.

Will brings a recruitment perspective, highlighting the challenges businesses already face in attracting and retaining talent. From high turnover in the first six months to misaligned expectations around hybrid working, he shares practical insights into how companies can better position themselves in a competitive market. The discussion also touches on the idea of “corporate catfishing” and the risks of overselling roles or culture during the hiring process.

Together, they emphasise that strong onboarding, clear communication, and realistic hiring strategies are not just legal safeguards but essential for business performance. They also discuss the pressures on smaller organisations without dedicated HR support and how a focus on fairness and reasonableness can go a long way in navigating complex and evolving regulations.

The episode closes with practical tips for employers, including tightening recruitment processes, improving briefing for recruiters, reducing unnecessary interview stages, and ensuring that offers and employee experiences align with expectations.

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Transcript

Andrew Whiteaker 0:03

Hello and welcome to the Employment Law pod from VoiceTurner. My name's Andy Whitaker. I'm a partner here in the employment team at VoiceTurner. And as ever with the pod, we like to talk about things that are interesting, new developments in employment law, new case law, or things that we just think you would like to hear about. And on today's pod, I'm joined by a special guest, Will Morris from Profectus Recruitment. Hi, Will. Hi, Addie. How are you doing? Yeah, very well, thanks. Very well. And the reason that Will is here is that we recently held an event together at our offices in Reading to talk about the Employment Rights Act, specifically some changes around unfair dismissal rights. And this is of particular interest to employment lawyers, obviously, but similarly, it's of a particular interest as well to recruit as Will.

Will Morris 0:51

Yeah, absolutely. I think certainly within the sector we operate in, which is the supply of tech candidates to the sector, primarily across the UK, the employment regulation changes are uh a key knowing and understanding that and be able to advise your clients as well. I found it really informative last week from your from your talk.

The Employment Rights Act Shift

Unfair Dismissal Rules Today

Andrew Whiteaker 1:10

Yes, and and and I uh and similarly I enjoyed some of the some of the advice that you provided as well. And I think the aim of this podcast today is to go through some of the issues that we discussed and to summarise some of the the takeaways that we we we landed upon as we got to the end of the session. So, no further ado, I'll sort of introduce, I guess, the reason that we we we raised this as an issue and why that we why we decided to talk about it. And as I said, it is related to the Employment Rights Act, which is the biggest change to employment law in the UK in 20 years. And there are an enormous amount of changes that are being introduced via the Act, some of which have been introduced already. Some more are going to be introduced during the course of this year, so 2026, more that will come in 2027, but then there's also a raft of other employment-related legislation that the government is looking to propose during the course of this parliament. So it's a period of significant change in employment law. And we could talk for a very long time about some of the changes around trade union rights, we could talk about some of the changes around family leave, changes to flexible working, which are being introduced over the next year or so. And indeed, we have spoken about them at length on the on the podcast before. But the particular issue that we wanted to raise was around the changes to unfair dismissal laws that are going to be introduced from January of next year. And this has been one of the headline pieces from the ERA and one of the issues that's been most well publicized. In the UK, in order to bring a claim from fair dismissal, ordinarily an employee needs to have two years of continuous service to bring that claim. That's not universally the case because there may be circumstances where an individual is dismissed because, let's say, they're pregnant or they're involved in union activities, and a dismissal for those reasons doesn't require a qualifying period. But for most terminations, to be protected from unfair dismissal, you need to have two years of qualifying service. Now that has changed and waxed and waned over the years. There was a chart that I used to rely upon when I did a university lecture a few years ago that showed the qualifying period going up and down, up and down over time. And across the chart, I'd coloured it red, blue, red, blue, red, blue, red, and then a little bit of yellow and blue, and then red again. And it just reflects the change of government. And pretty much every time there's a change of government, there's changes to the length of the city.

Will Morris 3:32

That's what I was going to ask you. You said it's the biggest change for was it 10 years or 20 years?

Six-Month Right And Uncapped Awards

Andrew Whiteaker 3:35

Yeah, absolutely. But it has, as far as the qualifying period is concerned, it's moved from two to one year and then back from one to two years. But the government's proposal, or at least when it was in opposition, it was suggesting that it was going to introduce protection from day one. So there being essentially no qualifying period whatsoever to bring an unfair dismissal claim. Now, as the proposal moved from a green paper to a manifesto promise to the king's speech into parliamentary legislation, and finally the past act, it did change. Initially, we thought we were looking at the introduction of something known as an initial period of employment. So an initial nine-month period where an individual would still have protections, but they'd be slightly watered down from the normal unfair dismissal rights. But where we ended up finally when the bill was passed last year and became the Employment Rights Act, was a six-month qualifying period. So we've not lost it's not become a day one right. We haven't got this initial period of employment, but we do have this six-month period after which an individual then acquires the full rights. And one of the issues that sits alongside that, which wasn't necessarily proposed to begin with and almost slipped in via the back door, is the removal of the cap on compensation for unfair dismissal. So that has traditionally sat at either a year's salary or a sum that's gone up with inflation every year and currently sits at around 120,000. But that's had numerous impacts. So for example, it means that very high earners, as a result, won't often look to employment tribunal claims for unfair dismissal because they simply can't be compensated for their full losses. And also, we do, from a practice perspective, quite often see individuals without the qualifying service looking to bring claims for discrimination or whistleblowing or other rights where you don't need a qualifying period of service, so they can get a claim in via the back door, if you see what I mean. And they can also potentially recover uncapped compensation. So the combination of those two changes, and this is to be implemented from the first of January next year, means that there's going to be an enormous amount of pressure on businesses to make decisions about recruitment within those first six months of employment, really definitive decisions about those employees and also a recognition that if we get that wrong, it then becomes potentially a much more costly issue to try and resolve and deal with.

Will Morris 6:08

Do you think, and this is certainly this question's borne out of conversations I've had with HR managers, do you th who have different interpretations? Do you think the probationary periods standard within contracts will will change?

Andrew Whiteaker 6:20

So there's two different things here. So after those six months, we know the individual is going to require those protections from unfair dismissal. Your contractual probationary period doesn't need to match it because it's a different thing. Because it's statutory. Yeah. So the a contractual probationary period invariably deals with things like enhanced notice provisions. So in your probationary period, you have one week's notice, for example, but then once you've got through your probation, that might be expended, extended up to a month, three months, six months, yeah, whatever is agreed between the parties in the contract. So those two things can continue to operate separately. They don't have to match up. But I think what businesses are going to have to really think about is what do they want to do as far as their probationary periods are concerned? Because if, for example, you're going to run a six-month probationary period and not make any definitive decisions until you get to that six month date, what happens if there's a bit of slippage or you're uncertain or someone is ill or something like that? If you're not planning to make a definitive decision until you get to that six months time period, you can all of a sudden by accident find yourself getting over and above the six-month period, and then the individual acquiring all of those protections before you've actually made a definitive decision about whether you want to keep that person.

Small Businesses Without HR Support

Will Morris 7:49

What we're seeing is what's often forgotten, and I think without getting political, what's often forgotten in the current government is a lot of organisations, a lot of businesses in the UK that aren't huge businesses that prop up the economy. So we work with lots of tech businesses. Yes, we work with some household names, but we work with organisations that may be five, 10, 20, 25 members of staff who don't have a proper experienced HR function within the organisation. Often HR is just tagged on to someone's responsibility, also as the office manager, and sometimes even the receptionist. Yeah, well, absolutely. What would you be your advice to those sort of organizations to position themselves in the best way so that they, I guess, ultimately don't have claims made against them, you know, and haven't really got the need or possibly the finances to hire an experienced HR person who really understands a landscape that, from what you're telling me, is changing continually as well.

Andrew Whiteaker 8:42

Yeah, well, awareness is obviously going to be really important. One of the reasons that we do the podcasts that we do and the events that we do is to try and spread, spread the word, where raise awareness so people know that these changes are coming and so they can prepare themselves for it. Fundamentally, I think when any individual starts a new job, and you'll know this better than I do, and you might want to add to this as well, you want to know that you found a new home, you've found somewhere where you're you connect with the people that you work with, that they're going to support you in respect of your day-to-day work, but also support you in terms of your career progression and additional training and support you in your career, I suppose. So every employer should be doing that, frankly, regardless of the existence or otherwise of an experienced HR manager. If you've got someone who's joining you, you want them to stay, you want them to feel happy and content and engaged and enthused. So it's the job of every manager who recruits someone in those initial months to do that and to engage properly with their employees to make sure that you build that rapport, there's clarity about what you are expecting that individual to do. Similarly, there's clarity from the individual about what they're expected to do. And that's just good business sense because you want them to be a really useful contributor to your business, and that doesn't happen if you don't engage with them.

Will Morris 10:10

Yeah, I couldn't agree more. I think you you picked up on some of the points I was obviously speaking about last week when we when we were speaking. I think I think I gave the stat uh roughly 25% of new hires leave within six months in the UK. They're validated figures. Don't ask me the source, I can't remember, but I did check those out. Yeah. Which is a huge number and a huge financial impact on on those organisations and and quite a logistical issue as well with with people coming and going and you know, aligning that to the latest employment regulations. So you're absolutely right. Having a robust, fair and honest sort of recruitment process, having a benefits package that is really in line with what employees look for these days. We've lost out on placements over the years where the benefits package at offer stage has been presented to a candidate and it's not aligned to either what they used to or what the competition is offering. And as I said, with that number of people you know leaving within that first six months, getting the onboarding side of it is absolutely, absolutely right. People make a you know, people get excited for their first day, and and you know, if if the basics are wrong, like we talked about, you know, the laptops not set up set up, and they spent the day with IT, getting access to systems and things like this, it's all of that's interlinked. So, you know, I I'm always available to just speak to our clients and advise them, you know. Ultimately, our job titles are recruitment consultants. So we always hang our hat on that word consultant, it's trying to give consultancy advice and not just filling jobs, it's actually giving advice to clients. So, whether that's in the form of benchmarking salaries, giving them advice on what's happening with benefits. We've had a few clients actually reach out about the employment regulation changes. Obviously, we invited them to the talk last week to hear your pearls of wisdom from it. So it's all interlinked and very aligned to to get it right. And it's I think it's even more important than ever, isn't it?

Corporate Catfishing And Hybrid Reality

Andrew Whiteaker 12:01

Yeah, I think so. There's it's a phrase I stumbled across a few months ago as well. I I don't know if it's in your lexicon too, but the the idea of corporate catfishing. Right. So businesses who will sell themselves or project a particular image of who they are, what they're like, what their culture is like, yeah, how they look after their people, the benefits they provide, the access or otherwise the benefits of bonuses, commissions, that sort of thing, to get people through the door, and then people turn up and they realise this this is not what was sold to me.

Will Morris 12:31

It's the the biggest example of that is the whole work from home. And I'm sure we we don't want to be talking about the work from home debate because we could talk about that for the next hour. But it's certainly interesting, and and looking at it as uh from a recruitment agency, I think it it's very rare that we get positions now that are fully remote. Uh pretty much everything is hybrid. And I think it was in the news this week John Lewis are looking to bring hybrid staff back into the office pretty much full-time. I'm not sure exactly how it works with John Lewis with them all being partners, aren't they? It's a slightly different setup, but it it's it it's funny how things are portrayed. And and after the lockdowns, there was a bit of a boom in regards to recruitment and and businesses as a whole, and a real desire to sort of get going. And a lot of businesses were quite happy to shout about how fantastically well they were doing, even with their staff working remotely now. Those same organizations aren't shouting about the fact they're actually asking those employees to come back to the office. So it's it's funny how things sort of pan out, but yeah, we've certainly seen a shift with with all of that as well, and you know, it's a harder economic times at the moment, isn't it? So yeah, absolutely.

Andrew Whiteaker 13:38

And and I think that goes back to what we were saying around you know, making the best of that, those initial months and and and running an effective onboarding process. This isn't just a legal compliance point. And I say this a lot when I provide training from managers because I appreciate that there's a lot of law out there, there's a lot of employment law out there, and there's lots of ways that you can get tripped up and make mistakes, and I get that. And talking about the the sort of the businesses that you were mentioning, you know, the smaller businesses, 20 to 50 employees maybe, with perhaps without a dedicated HR resource, I get that compliance can be tricky. But if you just look at the bottom line, when someone engages with you to bring someone in, there's fees that are associated with the service that you provide. There's a loss of productivity in the period before you manage to place that individual into the role while they're still running shorthanded. There's then going to be a reduction in productivity when the person joins, while they get up to speed and while they learn their role. And then, of course, if that placement fails and you have to start the whole thing again, all of this is just impacting upon your bottom line. And this is before we even think about legal compliance. This is businesses just losing money and not being as productive and effective as they could be. So the reason to do this, the reason to engage with the people that you hire early on and to get those onboarding processes right, make sure their laptop works, you know, all of the little things, the easy wins, making sure you get that right is not just about legal compliance, it's about running your business effectively.

Will Morris 15:13

Yeah, I we're seeing with organizations over the last few years within tech that they have in their mind what they're looking to hire for. And it'll be very specific. It it might be, you know, a modern workplace engineer with experience with co-pilots, as you 365, etc. Yeah, real specific. They want people who have who have rolled that out maybe or implemented that within a business. And they won't shift their mindset from that sort of perfect candidate. And I try to advise organizations sometimes if you can't find that perfect candidate, what impact actually does it have to your business of not having someone in situ? Because if you have someone who's, I don't know, 70-80% there in regards to the background and the skill set who is keen to pick up the additional skills, they they can probably be of benefit to the organisation quite quickly. But it doesn't change the fact that most clients still have very much in mind what they're looking for. So bring it back to what you were talking about. If someone doesn't work out and leaves after three or four months or even six months, it actually means the project deliverables can be the impact of that to the business and to the finances of not meeting those deadlines and those deliverables can actually be really significant. So it like all the bits we talked about, the onboarding, etc., getting that absolutely right and hoping that individual sort of sticks around. There's always variables that you can't control, you know, people's circum personal circumstances absolutely change and and they need to leave the organisation. But there's also you know, there is I think there's less loyalty as well. If you look at the average tenure of of employees within the tech sector, uh this is backed up with nothing other than me looking at CVs for the last 25 years. I can't support this view. But having looked at a lot of profiles, it was it was very rare for for the employees to not stick around at an organization for a little while. So typically you'd see someone spend four years somewhere, five years somewhere, maybe just two years in the next one, six in the next, that sort of vibe. I would say the majority of CVs we're seeing these days, candidates average ten years probably closer to about 18 months. Yeah. So if you're looking, you know, since 2020 over that sort of six-year period, it's not unusual to look at a CV and that individual's done four, five, six different different roles. Now, some of that will be down to the the role being misrepresented or or or the role not working out quite how how they would like, but it could also be about the areas we talked about, you know, positioning yourself in the right way with your benefits and your onboarding and and treating staff well. So people don't hang around as much in organizations that you don't get many lifers within organisations unless you work for boys' turner, actually.

Andrew Whiteaker 17:44

Well, we we we have some staff loyalty, which is a good thing, yeah. But but it's true, yeah, you're right. I mean, we we experience it as well. You know, people come in, they can yeah, they acquire particular skills and and experience, and then they want to move on. Yeah, that's that's the nature of of life, isn't it? I think more it's not just unique to our business or the sectors that you operate in.

Will Morris 18:02

I think it's just generally people are but I think organizations should focus on employees more because people do move on for either it's one of a couple of reasons. It's either progression or or skill progression, a change in circumstance, like we talked about you can't control or finances or a combination of. So if someone's offering a better, what they perceive as a better opportunity and more money, they're going to move on. What employees can do about that is actually make sure they are regularly benchmarking their existing team. We do this for a couple of organisations. I did it for the same organisation every year for about 15 years until they got acquired last year. We benchmarked the whole of their tech team, I think it was about 22 individuals, so that they ensured that they were being paid the right amount and they were looking after those individuals. And they had a great longevity of staff there at that organisation. Not so much now that they've been acquired, unfortunately, but they really managed to keep hold of those staff and they continually put them through training and advanced their skills, and that's what a good employer looks like. Yeah, it's sometimes lost, and it's just I think it's just the the way it is within really big organizations. A really big organization can look fantastic from the outside, but I won't name them. But there's a very well-known fintech organization who got a fantastic perception as advancing, trying to put my words carefully not to give them away, advancing in their particular sector, in their particular sector from the outside in. But within the organization, those I've spoken to who work there, it it's absolutely chaos and their turnover of staff is is is huge. And it does often seem aligned with the bigger companies they start. Once you lose that, it's very hard to bring that back.

Shorter Interviews And Better Briefs

Andrew Whiteaker 19:37

Okay, so we we've spoken a little bit about what we can do once the people have joined and the importance of making sure we get that onboarding right. We've also spoken about how sometimes we need to be a bit more pragmatic about how we recruit in and always holding out for that perfect candidate can sometimes be problematic if we then end up not being able to fulfill roles or fulfill projects because we just don't have the hands available. But I suppose to finish off, what would your top tips be in terms of making sure that you're identifying the best talent and that you're helping you, I suppose, do your job to get the right people coming to interview and then making sure that you're able to secure those people once you've engaged with them?

Will Morris 20:21

I again I could talk for a couple of hours about it, but if I was just going to give a snapshot, I think it's get all your ducks in a row. So iron out a recruitment process, iron out a benefits package, make sure that you've got an onboarding process, getting that bit right. That that anyone can can do that. Yeah. So beyond that, my biggest tip would be brief your recruiter. So whether that's an external recruiter, like like someone at my company, Prefectus, or whether it's an internal recruiter, the same implies. Brief that recruiter with real detail. And what I mean by that is not just a run of running through the skill set, talk to them about the opportunity within the organization for this for this hire. Talk about where they'll fit into the team, make sure during the process they're going to be meeting the people. What does that process look like and stick to it? A lot of clients don't stick to the process, it frustrates candidates with extra stages. And make, as I said, brief the recruiter, but make the pro on the process, but make the process purposeful. We talked about that last week. There's too many companies doing six, seven, eight stage interview processes. Yeah, no one needs to do that. So, yeah, I think my my main point would just be brief that recruiter so that they're fully prepared. It saves everyone's time. Candidates aren't being contacted about a role they're unsuitable for, candidates aren't being interviewed for a role they're unsuitable for, clients aren't wasting their time. Interviewing candidates are unsuitable. So get a plan, stick to it, figure out exactly what you're looking for, and brief the recruiter accordingly.

Andrew Whiteaker 21:58

Well, with all the changes that Being introduced over the next year or so, following those sort of steps, I think is going to give businesses the best possible chances of first of all finding the right people, getting them in, running a process that engages them and enthusiasm them to come in and accept the offers that might be made, and then hopefully make those offers or those placements stick as well once they join the business.

Keeping Up With Change Reasonably

Will Morris 22:21

Yeah, you you make an interesting but you used the term right candidate, and and I often pick up my consultants on the phrase when they talk about oh, it's the perfect candidate because they base it purely on skills. There's so much more than the skills that are relevant to a role, it's the situation, their location, their financial expectations that make them the right candidate. So I was going to ask you, like in the sense of you you talked about that the changes to employment regulations are so frequent. How how do you actually keep on top of them? Do you log into the HMRC each day? Or like how does it or the government website? How does it actually yeah?

Andrew Whiteaker 22:56

Well, I mean, fortunately, as lawyers, we subscribe to lots of different lots of different news sources. We have our own internal systems that we operate, we have we subscribe to some knowledge management systems as well, and updates are provided through there. So it it does enable us to sort of keep an eye on things. And certainly the employ the the journey of the Employment Rights Act has had many meanders and twists and turns as it's gone through Parliament. And then even now, the government publishes, has been publishing through the early part of this year, numerous changes to its its its timeline. So about implementation and the commencement of consultation exercises, opportunities for businesses to get involved, draft legislation being produced following the conclusion of those consultation exercises. So there is a lot of information coming out. And I recognize that businesses out there don't necessarily have all the resources that we have available to be able to tap into that. There are places that you can go, certainly the government websites do publish all their consultations, they do publish their timelines. There is information out there. Obviously, we produce stuff ourselves. So we have our newsletters that we produce, run this podcast, obviously, put webinars together. So we do the best that we can as well to disseminate the information that we get. Again, I I go back to a point that we made earlier on in the talk. It is hugely difficult, especially without a dedicated HR resource, to stay on top of absolutely every change that might be implemented from time to time. But that if you pick up a an old butterworth employment law guide with a very thin toilet paper type pages that's about, I don't know, six inches thick, there's a lot of employment law in there. And I recognise that. But the word reasonable comes up again and again and again on all those different pages. And if employers can engage with their employees reasonably, that's not a you know a perfect shield. That word that word I've heard that used right across legal situations. It's all about being fair and reasonable, isn't it? Yeah, it's exactly that. So, you know, we do our best to try and keep all of our clients and our contacts updated with all the legal changes that that come into force. But businesses should always focus on yeah, are we are we conducting this process reasonably? If we were on the receiving end or if we were the individual who's being subjected to this process, would we consider it to be reasonable? And if the answer to that is yes, you're more likely making fair and justifiable decisions than than you would otherwise be the case.

Will Morris 25:21

You must have days where you've planned your whole day out and you walk in and there's some changes, and it can you suddenly go into reading mode, you go and find a corner to sit in and read it all.

Andrew Whiteaker 25:29

Absolutely. If not quite as bad as it was in the days of COVID, and again, I appreciate this wasn't the biggest challenge that was going on at the time. But the government was clearly you know acting on its, you know, not quite making things up as it goes along, that's not fair, but there was so much it was having to react to very feet, thinking on their feet, and especially all the rules around furlough and that sort of thing, they were changing that almost on a 24-hour, 48-hour basis. They were then providing that information and publishing it. We were then having to digest it overnight, work out what it means, because come nine o'clock in the morning, our clients were ringing us and saying, What does this mean? Yeah, and us having to explain it. So we're we're not in a situation where there's such rapid change at the moment, but the ERA does represent a huge change. There's lots of moving parts. Consultation is amending some of the changes, so there's a lot to try and lot to try to keep tabs on, and obviously on on the employment law pod and through our other various media, we'll endeavor to keep everyone updated as the changes come in.

Will Morris 26:29

Yeah, that'd be good. I'll be keeping an eye out for it all.

Wrap Up And Subscribe

Andrew Whiteaker 26:31

Great stuff. Well, that's that's one subscriber. Thanks, Will. Brilliant. Well, thanks very much for your time, Will, and thanks everyone for listening to this episode of the Employment Law Pod. If you're interested in checking out any more of our episodes, then they can be found on the Voice Turner website, or alternatively, you can like and subscribe wherever you might listen to your podcasts. So, once again, thanks for listening and goodbye.