The Government has stepped back from its manifesto promise to introduce day-one unfair dismissal protection. Employees will now gain this right after six months of service, which is a significant reduction from the current two-year requirement, but not the immediate protection that was initially pledged.

What’s changed?

The Employment Rights Bill has faced considerable debate in Parliament, with peers and MPs at odds over several key provisions. To get the legislation through, ministers have agreed to a six-month qualifying period for unfair dismissal claims, down from 24 months.

This marks a notable departure from Labour’s election manifesto, which specifically promised protection from unfair dismissal as a day-one right. The Department for Business and Trade has positioned this as a pragmatic compromise that will “benefit millions of working people who will gain new rights and offer business and employers much-needed clarity.”

Despite this change, other major reforms in the Bill are still set to launch from April, including:

  • Day-one protection for sick pay

  • Enhanced parental leave rights

  • A ban on “exploitative” zero hours contracts

  • Restrictions on fire and rehire practices

  • The creation of the Fair Work Agency

The implications for employers

A shorter assessment window

Employers will have six months to evaluate new hires before full unfair dismissal protection kicks in. While this is considerably shorter than the current 24-month period, it offers more flexibility than the original day-one proposal.

Even during these first six months, good practice remains essential. Employment tribunals will still expect fair, reasonable and well-documented decision-making when dismissals occur, regardless of service length.

Built-in safeguards

The government has introduced two important protections:

  • The six-month qualifying period can only be changed through primary legislation, making it harder for future governments to extend it

  • The statutory compensation cap for successful unfair dismissal claims will be lifted (though specific details are yet to be confirmed)

How businesses are responding

Business groups have welcomed this modification. There were genuine concerns that day-one protections would increase costs and discourage hiring, particularly for small and medium-sized businesses trying to address recruitment mistakes without lengthy tribunal processes.

However, the government faces pushback from opposition parties and some employment rights advocates who see this as a retreat from promised worker protections.

Getting ready for the changes

The Employment Rights Bill won’t take full effect until 2026 (the exact date is still to be confirmed), but now is the time to prepare. Consider:

  • Reviewing and updating your probationary procedures

  • Strengthening documentation practices from day one of employment

  • Training line managers on the new requirements and fair dismissal procedures

  • Adapting your recruitment and onboarding processes

  • Updating employment contracts and handbooks to reflect the changes

It’s not yet clear whether the new rules will apply retrospectively to employees hired before the legislation comes into force, though this seems unlikely.

What this means for you

This Bill represents the biggest shake-up of employment law in over 50 years. Even with this U-turn, the changes will require thoughtful planning and implementation across every sector.

At Farleys, our employment law team is tracking these developments closely. We can help you understand what these reforms mean for your business and support you in updating policies, training managers, and handling dismissal situations in line with the new requirements. Get in touch if you’d like to discuss how we can help your organisation stay compliant as these changes roll out. Call 01254606008, contact us by email, or use the online chat below.