Government U-turn on day one unfair dismissal rights
We are advising employers in Yorkshire to familiarise themselves with significant late-stage changes to the Employment Rights Bill (ERB), after the government confirmed it will not proceed with its proposed day-one unfair dismissal rights.
The announcement was made on 27 November, following several weeks of parliamentary "ping-pong" between the House of Commons and the House of Lords during October and November. After repeated resistance from the Lords, the government has introduced a compromise aimed at clearing the path for the remainder of the bill to progress.
Our employment law advisor, Brendan Bah, explained: "The government has now confirmed that instead of the current two-year qualifying period required for employees to claim unfair dismissal, this threshold will be reduced to six months. This marks a substantial shift from the day-one rights that were originally promised, and it also comes with an intention to remove the power for future governments to amend the qualifying period."
The government has stated that "the compensation cap (for unfair dismissal) will be lifted", although no further detail has been provided. Brendan added: "At present it is unclear whether 'lifted' will mean 'increased' or entirely removed. We expect further clarification, but employers should be aware that this point could have considerable implications for dismissal-related liabilities."
Additional elements of the bill remain under active debate, including guaranteed hours for zero-hours workers and a series of amendments relating to trade union matters. How the newly announced compromise will influence the Lords' position on these issues is yet to be seen.
We warn that Yorkshire employers should not underestimate the scale of change ahead. Brendan continued: "Even with staged implementation, businesses will face a demanding period of adaptation. HR teams and leadership boards will need to assess their current policies and processes in light of these new requirements. Early preparation is strongly advisable."
Our employment specialists are working closely with organisations across Yorkshire and beyond, supporting them with policy reviews, implementation planning, and ongoing advice as the bill progresses. If you are in need of support also contact Brendan Bah.
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