Labour drop plans for day-one unfair dismissal rights

The back and forth between the House of Commons and House of Lords on this issue appears to have come to an end today, with Labour backing down.  

They will now accept a six-month qualifying service period, as opposed to plans for day-one unfair dismissal rights, proposed within the new Employment Rights Bill.  

However, this needs to be confirmed in Parliament first - it returns to the House of Commons on the 8th of Dec. Consultations are expected to follow with details on how these changes will be implemented.  

Why has this happened?  

Labour’s manifesto included a pledge to create "basic rights from day one to parental leave, sick pay, and protection from unfair dismissal". 

However, concerns quickly emerged, led by discussions about how this would overwhelm both small businesses and the already backlogged employment tribunals system. 

The latest announcement has provided some business owners with a sense of relief. Kate Nicholls, chair of UK Hospitality, said: "This is a pragmatic change that addresses one of hospitality businesses’ key concerns.” The six-month waiting period would ‘give businesses much-needed breathing room and avoid further damage to employment opportunities,’ she added. 

In addition, the national chair of the Federation of Small Businesses (FSB) said firms had been ‘extremely worried’ about day-one protection from unfair dismissal.  

Mixed feelings amongst MPs  

Labour MPs are not so pleased with this U-turn. Labour backbencher, Bell Ribeiro-Addy, said she was ‘very disappointed’ that the party was rolling back on a fundamental manifesto pledge, something that will ‘worry a lot of people’. 

What does this mean for UK businesses?  

For business owners in the UK, the next steps include preparing for the changes coming into effect in April 2026 once the law has been confirmed. As mentioned, other day-one rights are planned to go ahead, including: 

• Sick pay  

• Paternity leave 

While day-one rights for unfair dismissal won’t become law, the six-month qualifying period still means employers need to take care before dismissing an employee. Employers must identify a fair reason for dismissal and follow the correct procedures when doing so. 

Do you want to get ahead of the upcoming changes? Get advice from HR experts to make sure your future policies comply with the new Employment Rights Bill when it comes into force. 

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For more on how you can prepare, download our Employment Rights Bill guide today.