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

Updated 2/12/25

After months of back and forth between the Government and the House of Lords over proposed changes to unfair dismissal qualification, the Government have 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. 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 it has put in place, 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; however, it has been reported that a motion is being tabled to bring in the right from 2026 instead. The Government has also indicated that there may be further changes to the compensation regime for unfair dismissal, including potentially removing the current 52-week compensation limit but retaining the overall compensation cap. We await further details on this.

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 schools, education institutions and HR teams to do. Having robust probation and on-boarding processes, having clear evidence of fair decision making and a fair process, and ensuring that heads of department and line managers are trained in how to manage effective probation periods will be crucial to avoiding ordinary unfair dismissal claims.

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