After months of dispute between ministers and peers, the government has accepted a six-month qualifying period before most employees gain protection from unfair dismissal.
The move clears the way for the Employment Rights Bill, following the House of Lords’ opposition to plans to introduce unfair dismissal rights from the first day of employment. Currently, staff generally need two years of continuous service before they can bring an unfair dismissal claim, so the six-month threshold still represents a significant expansion of rights.
The compromise follows extended talks with employer groups, unions and other stakeholders. Under the agreement, the unfair dismissal provisions in the Bill will be scaled back, allowing it to reach Royal Assent on schedule and keep the government’s timetable for wider reforms.
From April 2026, statutory sick pay and paternity leave are set to become day-one rights, alongside the launch of the new Fair Work Agency. Ministers argue that millions of workers, including many on low pay, will benefit, while warning that delays to the Bill would have pushed these measures back.
Business representatives have also emphasised that employers require time to adjust their policies, systems and contracts to the new regime. Smaller organisations, in particular, are expected to review their recruitment, probation and performance management arrangements over the next two years.
The six-month qualifying period for unfair dismissal is not expected to take effect before 2027, based on previous government statements. Further guidance is likely to be provided once the Bill has completed its passage and secondary legislation is published.
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