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.
Unfair dismissal rights
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 rise in employment litigation as a consequence of the new legislation.
The Lords backed the amendment by 304 votes to 160. It was sponsored by Lord Hunt of Wirral and crossbench peer Lord Vaux of Harrowden.
The amendment could 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.
Stephen Simpson, employment law and compliance expert at Brightmine, said the Lords vote was a “significant moment” for the Employment Rights Bill. Research by Brightmine has shown that more than three-quarters of HR professionals (76.3%) think day-one unfair dismissal rights will have a significant impact on their organisation.
Simpson said: “Under current rules, employers have more flexibility to manage underperforming staff within the first two years of service. If the changes go ahead, companies will still use probation periods but would need to demonstrate a fair process from the start.
“This increases pressure on HR teams to juggle multiple moving parts, 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.
“HR teams are already under significant pressure, and the risk of a spike in tribunal claims is real if not handled with care.”
The changes to unfair dismissal regulations are timetabled to come into force in 2027, according to a roadmap published by the government at the start of July.
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