- News
- Business
People will need to have six months of service to claim unfair dismissal against their employer under the proposed change.
Nina LloydThursday 27 November 2025 18:05 GMT
open image in galleryBusiness Secretary Peter Kyle (Yui Mok/PA) (PA Wire)
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails
Sign up to our free breaking news emails
Sign up to our free breaking news emails
Email*SIGN UPI would like to be emailed about offers, events and updates from The Independent. Read our Privacy notice
Ministers have abandoned plans to give workers day-one protection against unfair dismissal in a bid to ensure the Government’s Employment Rights Bill makes it through Parliament.
The Government now intends to introduce the right after six months of service instead – down from the current qualifying period of 24 months – in a U-turn which breaches Labour’s manifesto.
The legislation has been caught in a stand-off between peers and MPs over the Government’s plan to give workers protection on their first day in a job, as well as measures to ban “exploitative” zero hours contracts.
The Department for Business and Trade insisted the updated package would still “benefit millions of working people who will gain new rights and offer business and employers much-needed clarity”.
“To further strengthen these protections, the Government has committed to ensure that the unfair dismissal qualifying period can only be varied by primary legislation and that the compensation cap will be lifted,” the department said.
TUC general secretary Paul Nowak said the “absolute priority” was to get the legislation on to the statute books.
“The Employment Rights Bill is essential to better-quality, more secure jobs for millions of workers across the economy,” he said.
“The absolute priority now is to get these rights – like day-one sick pay – on the statute book so that working people can start benefiting from them from next April.
“Following the Government’s announcement, it is now vital that peers respect Labour’s manifesto mandate and that this Bill secures royal assent as quickly as possible.”
Business Secretary Peter Kyle had hinted at the prospect of a concession earlier this week in a bid to reassure firms, insisting there would be extensive consultations about the measures in the Bill.
Confederation of British Industry (CBI) boss Rain Newton-Smith had argued on Monday that the legislation would take the country “backwards” in its current form.
Business groups welcomed the change, saying the qualifying period of six months to make a claim was “crucial for businesses’ confidence to hire and to support employment, at the same time as protecting workers.”
The British Chambers of Commerce, Chartered Institute of Personnel and Development, CBI, Federation of Small Businesses, Recruitment and Employment Confederation and Small Business Britain said: “Businesses will be relieved that the Government has agreed to a key amendment to the Employment Rights Bill which can pave the way to its initial acceptance.”
The joint statement added: “This change addresses the key problem that must be sorted in primary legislation.
“It shows that dialogue works and is a model for how to consider the important questions that need answering in regulations before new rules come into force.”
However, the groups warned that firms would “still have concerns” about many of the powers within the Bill, including thresholds for industrial action, guaranteed hours contracts and seasonal and temporary workers.
“We remain committed to working with Government and unions to dealing with this in the necessary secondary legislation to implement the Bill,” they said.
“We must ensure that it supports opportunity for workers while avoiding damage to economic growth.”
In its election manifesto, Labour said: “We will consult fully with businesses, workers, and civil society on how to put our plans into practice before legislation is passed.
“This will include banning exploitative zero hours contracts; ending fire and rehire; and introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal.”
Tory leader Kemi Badenoch described the move as “another humiliating U-turn” for Labour and said the legislation still contains “measures that will damage businesses and be terrible for economic growth”.
“If Labour won’t scrap the worst elements of this awful Bill, we will. Britain cannot build prosperity with more and more bureaucracy,” she said.
Unite general secretary Sharon Graham said: “The Employment Rights Bill is a shell of its former self.
“With fire and rehire and zero hours contracts not being banned, the Bill is already unrecognisable.
“These constant row-backs will only damage workers’ confidence that the protections promised will be worth the wait.
“Labour needs to keep its promises.”
Alex Hall-Chen, principal policy adviser for employment at the Institute of Directors, said: “This is great news for businesses.
“We have consistently called for changes to the Employment Rights Bill, with the introduction of day-one protections against unfair dismissal our number one area of concern.
“Time and time again business leaders have told us that day-one protections against unfair dismissal would increase the cost of employment and disincentivise hiring.
“The Government’s climbdown will give employers the confidence that they can correct hiring mistakes without risking lengthy and expensive tribunal cases.”