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A key part of the government’s Employment Rights Bill is the introduction of a ‘day one’ right to claim for unfair dismissal. The House of Lords has significantly amended this proposal with the peers voting to replace the planned system with a more streamlined approach – having a six-month qualifying period to attain unfair dismissal rights.
From ‘Day One’ rights to a nine-month buffer
The government’s initial proposal, expected to come into force in 2027, aims to extend protection from unfair dismissal to all employees from their first day of employment. The original proposal also introduced an ‘initial period of employment’. This was to be a nine-month window during which employers could dismiss staff using a yet-to-be-determined, simplified process. The intention was to balance fairness for employees with commercial flexibility for employers.
Lords’ amendment: six months instead of structural reform
The House of Lords has now voted to remove the ‘initial period of employment’ entirely, opting instead for a simpler amendment to reduce the unfair dismissal qualifying period to six months. The arguments for this are that it:
- Offers earlier protection to employees in a clearer, more accessible way;
- Avoids the need for a new legal framework; and
- Reduces the administrative burden for employment tribunals.
What happens next?
The Bill will return to the House of Commons. Considering the government’s manifesto commitment to ‘day one’ rights, it is likely that the Lords’ amendment will be rejected. Ministers may seek to reinstate the original proposal – including the nine-month initial period.
Under the Salisbury Convention, the Lords do not usually obstruct government manifesto pledges. Therefore, although peers may press for reassurances or further clarification, they are still expected to allow the Bill to pass into law.
Practical implications for employers
The final outcome will have significant implications for hiring and dismissal strategies. If the original version passes, employers will need to navigate a more complex dismissal route for new starters during the initial nine-month period – with legal and procedural details still to be confirmed.
If the six-month amendment is accepted (or a compromise is reached), employers would instead face a simpler legal landscape, albeit with reduced time to assess and manage underperformance before full protection from unfair dismissal.
Either way, businesses should prepare for a significant change. Probation periods, performance management frameworks, and dismissal procedures may all need revisiting as the new regime takes shape.