The government has reversed its manifesto promise to give all workers the right to claim unfair dismissal from their first day in a job. Now, the government plans to grant this protection only after six months, following concerns from business groups who warned that immediate protection might deter hiring.
This decision aims to prevent the employment legislation from facing delays in the House of Lords, where it has encountered opposition. Despite this climbdown, new rights for sick pay and paternity leave will still be implemented on day one, with a start date set for April 2026.
A government source indicated that most unions supported the changes, although Unite expressed that this U-turn would "damage workers' confidence." In contrast, business groups appreciated the announcement after discussions with major industry bodies and unions, acknowledging a collective relief while still expressing "concerns about many of the powers" within the government's employment package.
Currently, employers must navigate additional legal steps if they wish to dismiss employees who have been in their position continuously for two years or more, justifying the removal based on conduct, capability, and by following a fair procedure.
Labour's initial plan intended to abolish this qualifying period altogether, replacing it with a nine-month legal probation period. This change was a major manifesto promise during last year's general election, central to Labour's Employment Rights Bill. Labour committed to establishing "basic rights from day one," including parental leave, sick pay, and protection from unfair dismissal. Responding to queries about breaching the Labour manifesto, Business Secretary Peter Kyle stated: "No," instead emphasizing a commitment to "bring people together" rather than setting opposing sides against each other. He explained that the compromise had been achieved collaboratively between "unions and the employers," stating it was "not my job to stand in the way of that compromise."
The government now proposes instituting unfair dismissal protection after six months, foregoing the new legal probation period. Recent sessions in the House of Lords have twice approved implementing a six-month period, delaying the legislation's progression through Parliament. In addition, the government announced the establishment of the Fair Work Agency, a new body to oversee these rights, set for 2026.