Employment Rights Bill: Labour "u turns" on rights to claim unfair dismissal

The Government has today (27 November 2025) announced that its manifesto pledge to bring in day-one unfair dismissal rights will be dropped in favour of a six-month qualifying period of service. 

This is a huge change to the proposals under the Employment Rights Bill first put forward by the Government. The House of Lords had twice rejected the proposal for a day-one unfair dismissal right, instead putting forward a six-month qualifying period of service.

This change effectively means that, subject to other proposed amendments made by the House of Lords, the Employment Rights Bill should receive Royal Assent before the Christmas Parliamentary recess (18 December 2025). The reason given by the Government for accepting a six-month qualifying period of service for unfair dismissal was to allow the Bill to pass and the implementation timetable not to slip.

We expect the new change to unfair dismissal qualifying service will still take effect from 2027 according to the Government’s own road map. The Government has also indicated that there may be further changes to the compensation regime for unfair dismissal, including potentially removing the current cap, but we await further details.

The change, whilst welcomed as it ends months of Parliamentary 'ping-pong' and uncertainty for employers, still means there is a lot of work for employers and HR teams to do. Having robust probation and on-boarding processes and programmes, having clear evidence of fair decision making and a fair process, and ensuring that managers are trained in how to manage effective probation periods will be crucial to avoiding ordinary unfair dismissal claims.

For further information on the Employment Rights Bill and how we can support you, please contact a member of our Employment team or submit an enquiry form, below.