Rights, rewrites and reform: unfair dismissal and the Employment Rights Bill

The Employment Rights Bill promises to bring some of the most significant changes to employment law in recent times, as we discussed in our previous article (click here to read).

However, one of the Bill’s flagship reforms - day one protection from unfair dismissal - has not been without controversy. It has understandably been the key focus of the Bill for many employers who have been anxiously waiting for more details on the Government’s plans.

It was a manifesto commitment of the Labour government to remove the current two-year qualifying period for unfair dismissal protection, making it a day one right for employees. To reassure employers, the Bill proposes an “initial period of employment” expected to last around six to nine months, during which “lighter-touch” dismissal rules will apply (with the detail of these to be fleshed-out later in subsequent regulations). 

The House of Lords has continued to oppose this, instead arguing for a straightforward reduction in the current two-year qualifying period to six-months. This is something the Government has refused to date, which is perhaps unsurprising given accepting this amendment would mean breaching a manifesto commitment. 

But the Lords are not alone. Thinktanks and businesses alike have raised concerns about the risks of a day one unfair dismissal right, warning that it may place a substantial burden on employers, inhibit hiring, make life harder for job-seekers and ultimately harm the economy. These are aside from the inevitable resultant rise in tribunal claims, putting an already struggling system under further strain.

Where are we now?

In an unusual move from the House of Lords, on 28 October 2025, they opposed a Government manifesto commitment for a second time by again insisting on a six-month qualifying period for unfair dismissal rights. The issue will now return to the House of Commons for further debate. 

Where do we go next?

The Government are now in a difficult position. Do they abandon one of their key manifesto commitments, or do they agree to compromise in order to break the deadlock and move forward with implementation?

What is clear is that the Bill’s passing is set for a delay whilst the issue of unfair dismissal protection and several other matters are debated further. 

Notwithstanding the delay, employers should start to turn their attention to the reforms that we do know are on the horizon and consider how they might need to update their contracts, policies and practices in due course.