The House of Lords has voted for an amendment to the Employment Rights Bill that would replace day-one unfair dismissal rights with a six-month qualifying period.
The day-one right to make a claim for unfair dismissal was one of the key pledges in Labour’s pre-election manifesto published last year.
Early drafts of the legislation referred to an “initial period of employment” when employers could dismiss staff for a certain number of reasons, but this period was not specified.
The Lords have now voted to remove this initial period entirely, and have amended the Bill to reduce the qualifying period for unfair dismissal from the current two years to six months.
This would improve protection for workers by allowing them to make a claim much sooner, but also means that there would be no need to introduce a new legal structure to account for the qualification period.
It would also reduce the burden on the tribunal system, with employment lawyers concerned that there will be a huge rise in employment litigation as a consequence of the new legislation.
The Lords’ amendment is likely to be rejected when the Bill goes back to the House of Commons. If this happens, ‘day-one’ rights could still go ahead with some complex conditions on the initial period of employment, which could be longer than six months.
This is a significant moment for the progress of the Employment Rights Bill. Under current rules, employers have more flexibility to manage underperforming staff within the first two years of service. If the changes go ahead, organisations will still be able to use probation periods, but would need to demonstrate a fair process from the start.
This would increase the pressure on HR teams to juggle things, particularly if line managers fail to follow the right process. The Lords’ rejection highlights the risks of introducing sweeping reforms within Labour’s first six months in office, without proper consultation with employers.
The changes to unfair dismissal rules are timetabled to come into force in 2027, according to a roadmap published by the government at the start of July.