Government drops ‘day-one’ unfair dismissal rights

The government confirmed yesterday that it would not be pursuing the introduction of a ‘day-one’ right for employees to be protected from unfair dismissal. Instead, the government has confirmed that it would adopt a six-month qualifying period before an employee can bring a claim of unfair dismissal in the Employment Tribunal.

The government was defeated twice in the House of Lords on its proposal for ‘day-one’ unfair dismissal rights and its associated ‘light touch’ regime during a statutory probationary period.

What next?

This represents a significant change in direction from the government which included a right to ‘day-one’ protection from unfair dismissal in its manifesto when it was elected in 2024. From the government’s perspective, it appears the desire is to make this concession in order to facilitate the Bill’s passage through Parliament in line with its current roadmap.

Despite not progressing with ‘day-one’ unfair dismissal rights, a six-month qualifying period for an unfair dismissal claim is a significant change for employers and will make it more important for employers to have robust probationary period procedures in place in advance of 2027 when it is expected this provision will come into force.

The government press release also confirms that the intention will be to set the qualifying period for unfair dismissal to six months under primary legislation (which will make it more difficult for a subsequent government to increase the qualifying period in future) and to “lift” the current compensation cap (it is unclear at the moment what this would mean but it has been suggested that the 52-week’s gross pay cap will be removed but the statutory cap, set each year by the government, will remain).

It is also important to note that the House of Lords also made other amendments to the Bill on matters such as zero hours contracts and trade union reform, so we will need to wait and see whether there are further amendments on these areas before the Bill passes.