Since the labour party’s manifesto pledge to make unfair dismissal a day one right, the topic has been the centre of media headlines along with questions as to how it would work in practice.
The proposed Employment Rights Bill sought to make the pledge a reality, with unfair dismissal rights being granted on day one of employment, but with a probationary period (or “initial period of employment” of 9 months) whereby justifying a dismissal may be slightly easier for employers.
However, in a dramatic development and a blow to the government, the House of Lords has now voted to significantly amend one of the key safeguards in the Bill.
The House of Lords voted to remove the concept of an initial period of employment altogether. Instead, they backed an amendment that would reduce the qualifying period for unfair dismissal from two years to six months. This offers earlier protection to employees without creating a new legal structure.
The Lords argued that this approach is both simpler and fairer. It avoids the need for a separate dismissal framework and reduces the potential for legal uncertainty during what would otherwise be a newly defined period.
What happens next?
The Employment Rights Bill will now return to the House of Commons. The government is expected to reject the amendment and restore its original manifesto proposal for day one rights coupled with an initial nine month period.
This will set up a fresh debate between the two Houses. The Lords will need to decide whether to insist on their simplified model or allow the Commons to press ahead with the more complex structure promised in the government’s manifesto. Under the constitutional principle known as the Salisbury Convention, the Lords generally avoid blocking legislation that delivers on an election promise. The expectation is that they will raise concerns but ultimately allow the Bill to proceed. However, we would note that the proposals from the House of Lords seem very sensible, in light of the significant impact on employers (and indeed, on Tribunal backlogs).
What Should Employers and HR Teams Be Doing Now?
Although the legislation is still making its way through Parliament, employers should begin preparing for change. Whether the qualifying period becomes six months or day one protection in some form what is almost certain is that the current two year period will be shortened.
HR teams should still be reviewing their onboarding, probation and performance management policies. Greater emphasis will need to be placed on documenting concerns and giving meaningful feedback at an early stage. Managers should be trained to identify issues within the first few months of employment and to follow a fair process even during probation.
It is also advisable to keep records of informal conversations and any early concerns raised. This will be vital if disputes arise within the shorter qualifying window that is likely to apply under the new law.
We are monitoring developments closely and will provide updates as the Bill progresses through Parliament. In the meantime, if you have questions about how to prepare for the changes or need to update your internal procedures, please get in touch with our employment team.
