Employment Rights Bill: Government U-turn on Day One Unfair Dismissal Rights

The Government has confirmed a significant change to one of the most talked about proposals in the new Employment Rights Bill. Plans to introduce day one protection from unfair dismissal have now been scaled back, with ministers announcing a six month qualifying period instead (whilst maintaining existing day one protection against discrimination and automatically unfair grounds for dismissal)

Under earlier proposals, employees would have been protected from unfair dismissal from the moment they started their job. This would have represented one of the largest shifts in UK employment law in decades.

However, following concerns from business groups and employers about the operational impact, the Government has amended the proposal. Workers will now need six months of service before gaining protection, which acts as a compromise between the current two year qualifying period and the previously announced day one approach.

Employment Rights Bill: MPs Approve Amendments Ahead of House of Lords Review

MPs have now voted in favour of the government’s amendments to the Employment Rights Bill, confirming their support for two significant proposed changes to unfair dismissal legislation. These changes will now go to the House of Lords for consideration.

Proposed Six-Month Qualifying Period for Unfair Dismissal

The amendments confirm that the qualifying period for unfair dismissal protection would be reduced from two years to six months, with a planned commencement date of 1 January 2027.

The government has indicated that this would apply retrospectively, meaning employees with six months’ service or more on that date would be covered under the new rules.

Under this proposal, someone employed from today will gain protection against unfair dismissal on 1 January 2027. That is almost a full year earlier than under the current law.

Other employees will gain protection once they reach six months’ service; for example, someone who starts work on 1 November 2026 will qualify for protection from unfair dismissal on 1 May 2027.

Proposed Removal of the Compensatory Cap

MPs have also backed an amendment to abolish the compensatory cap for unfair dismissal awards. If implemented, this would remove the current upper limit on compensation in unfair dismissal cases.

What Happens Next?

The Bill returns to the House of Lords on 10 December for consideration of the Commons’ amendments. If approved, it could move quickly to secure Royal Assent before Parliament rises on 18 December.

Important points for employers to consider include:

Probationary periods will remain important, as the new timeframe aligns with many existing probation structures.
Performance management remains essential, as clear processes continue to reduce risk.
Employers may feel more confident when hiring, especially smaller businesses that rely on early flexibility during the onboarding phase.

At Cubed Talent, we view this update as an important stabilising move for the labour market.

Had day one rights been introduced, employers may have become more cautious about hiring quickly. The six month compromise helps avoid unnecessary hesitation while still improving protections for workers.

Our view at Cubed Talent

This is a major policy shift, but also a pragmatic one. The Government’s decision aims to balance fairness with flexibility, supporting a more confident and stable recruitment environment.

We will continue to monitor developments within the Employment Rights Bill and will keep our clients and candidates updated as further details emerge.

If you would like support reviewing your hiring processes or preparing for upcoming legislative changes, we are here to help.