Employment Rights Bill Unfair Dismissal Manifesto Pledge & Initial Proposals
The original plan was to introduce ordinary unfair dismissal protection from the first day of employment. This would have removed the existing two year qualifying period and created a new framework where every dismissal required a fair reason and a fair process from the moment employment began, alongside existing day one protections for discrimination and automatically unfair reasons. Alongside this, the Government proposed a statutory probation period, expected to be around nine months, which would have operated as a separate legal structure with defined procedural expectations. The manifesto position was that workers would gain basic rights from day one, including unfair dismissal protection, sick pay and paternity rights. Taken together, these proposals would have created a substantial shift in how employers manage early performance issues, cultural fit concerns and onboarding risk.
From Day One to Six-Months
The proposals ran into sustained resistance during the Bill’s passage through the House of Lords. Peers amended the draft legislation twice to replace day one ordinary unfair dismissal protection with a six month qualifying period, signalling they would continue to obstruct the Bill unless the Government accepted the change. At the same time, major employer groups warned that day one protection would increase hiring risk and slow recruitment, particularly for smaller organisations without dedicated HR capacity. The Government has now accepted the Lords’ amendment and confirmed that the new ordinary unfair dismissal framework will start at six months. Existing day one protections for discrimination and automatically unfair dismissal grounds remain in place. Plans for a statutory probation period will not be taken forward as part of the compromise package, so employers will continue using contractual probation arrangements.
Setting the six month qualifying period through primary legislation rather than relying on the existing power in the Employment Rights Act 1996 to vary the threshold creates a more fixed position. It means any future change to the qualifying period is likely to require another Act of Parliament, rather than secondary legislation. The Department for Business and Trade has also signalled that the compensation cap for unfair dismissal will be “lifted”, although the announcement is unclear on whether this means removing the cap entirely or altering the current combination of the statutory maximum and the cap of a year’s salary. The package is intended to break the deadlock with the House of Lords and to give peers sufficient ground to step back from wider opposition, increasing the chances that the Bill becomes the Employment Rights Act 2025 on the Government’s current timetable.
The Government has confirmed that the six month qualifying period will be written into the final version of the Employment Rights Bill, replacing the original plan for day one protection for ordinary unfair dismissal. Ministers have framed the move as a necessary compromise to keep the wider reforms on schedule and avoid further delays in the House of Lords. The statutory probation period has been dropped, so there will be no new statutory framework governing probation and employers will continue to operate contractual probation periods. Day one sick pay and paternity leave are still scheduled to take effect in April 2026, with wider day one and other reforms continuing to move ahead under the Make Work Pay timetable. The Government has stated that the negotiated position reflects agreement between employer groups and unions, although several unions have criticised the decision as a retreat from the manifesto. The Bill will now move forward in line with the amended structure, with secondary legislation to follow once Royal Assent is secured.
DMS Perspective: Impact on Employers
For employers, this softened approach still results in a stricter and higher risk position, as moving from a two year qualifying period to six months is a major departure from the current rules. It compresses the window in which you can dismiss without ordinary unfair dismissal protection, so early performance, conduct and cultural fit issues will need closer, faster handling.
Probation will become more important. Many organisations tend to treat probation quite informally, but under the new rules, this will have to move to being a core part of your litigation risk profile. You will need clear expectations from day one, documented reviews, records of feedback and a rational explanation if you decide to terminate as you approach the six month point.
Tribunals are unlikely to expect a full capability process at that stage but they are likely to look for evidence that a decision was not arbitrary or discriminatory and that the employee had some opportunity to respond.
The removal of the statutory probation proposal is helpful in one sense because it avoids a new set of rigid legal rules. However, it also means the only framework that exists will be the one you design and implement. Where policies and contracts have evolved piecemeal over time, this is the moment to align them.
Employers should be reviewing template contracts, probation clauses, disciplinary and capability policies and manager guidance so that they all recognise six months as a new tipping point.
Line managers will need practical training about what to do at month three, month five and month six, and HR teams will need to track service dates more accurately than before so that warning signs are picked up in time.
The closer you get to the end of that six month period without action, the harder it will be to defend a later dismissal.
There is also a strategic workforce planning angle. A shorter route to ordinary unfair dismissal claims may nudge some organisations toward more temporary staffing models or heavier use of agency workers where appropriate, especially in high turnover roles. Others will decide that the better response is to invest in selection, recruitment and onboarding so that fewer hires reach the six month mark in difficulty.
In all, the six-month unfair dismissal period is not entirely a crisis averted, nor is it a minor technical change. It will require a full review of contracts, policies, HR systems and manager behaviours if you want to avoid a spike in early service claims once the new regime goes live. You cannot assume that because your tribunal history has been quiet under the two year regime, your existing practices will remain low risk under the new rules.
Employers should also avoid seeing the unfair dismissal compromise in isolation from the rest of the Employment Rights Bill. Day one sick pay and paternity rights are still scheduled from April 2026 and other reforms on predictable working, zero hours arrangements and union rights are moving ahead. The cumulative effect is more scrutiny on working practices, more empowered workers and more data points for regulators and unions to use in negotiations or disputes. Using the next year to audit documentation, tighten HR processes, educate managers and plan communication with staff will be important. Waiting until the Bill receives Royal Assent and secondary legislation is published will leave very little time to adapt before the new regime starts to apply.
Need Assistance?
If you need tailored guidance on the impact of the six month qualifying period or support reviewing your dismissal and probation processes, you can book a fixed-fee telephone consultation with one of our employment law advisers for practical advice on your next steps.
