The UK Government has announced a significant change to its Employment Rights Bill, taking a step back from its original pledge to give workers protection against unfair dismissal from their first day in a job. Alternatively, this right will now apply after six months of continuous employment. Existing day-one protections against discrimination and automatically unfair reasons for dismissal remain unchanged. With other proposed day one-rights, sick pay and paternity leave, still going ahead as planned.
Why Did the Government Change Its Position?
The decision follows strong concerns from business groups that day-one protection could discourage hiring and overwhelm an already stretched Employment Tribunal system. Ministers also faced resistance in the House of Lords, which twice voted for a six-month qualifying period.
What does this mean for Employers and Employees?
For employers, it introduces a need for clearer processes and fair decision-making sooner, as dismissals will carry a higher risk of legal challenge.
For employees, this means they will gain stronger job security much earlier in their employment, with the ability to challenge unfair treatment after just six months rather than the current two years.
The Government has also confirmed that any future changes to this qualifying period will require primary legislation, and that the compensation cap will be lifted. This could potentially lead to larger payouts in successful claims for employees while increasing potential costs for businesses. There is still a lack of clarity around the removal of the compensation cap but the most likely intention is that the cap of one year's pay will be removed but the overall maximum award of £118,223 will stay.
Reactions from Business Groups, Unions and Politicians
Business groups largely welcomed the compromise, calling it 'pragmatic change' that eases hiring concerns, though they still voiced reservations about other aspects of the employment package.
Most unions accepted the six-month threshold, prioritising the swift implementation of other day-one rights like sick pay and paternity leave, but Unite criticised the U-turn as damaging to workers' confidence.
Meanwhile, some Labour MPs branded the move a betrayal of a key manifesto pledge, while Conservatives dismissed the legislation as 'not fit for purpose'.
The Employment Rights Bill has now successfully passed through Parliament and is expected to receive Royal Assent in the coming weeks. The changes introduced by the Bill are scheduled to take effect from April 2026. We will update and inform in due course.
With unfair dismissal rights set to apply after just six months, and compensation limits likely to increase, both employers and employees should take proactive steps now.
- Employers should review probation procedures, dismissal processes, and management training to reduce the risk of costly claims.
- Employees should understand their enhanced rights and seek advice early if they believe they have been treated unfairly.
If you are unsure how these changes could affect your organisation or your rights at work, early advice can make all the difference. Our employment law specialists can help you navigate these changes with confidence.
Get in touch today on 0141 221 1919 or email This email address is being protected from spambots. You need JavaScript enabled to view it. to discuss what the Employment Rights Bill means for you and how to prepare.
