The House of Lords has rejected proposals in the Employment Rights Bill to introduce a day one right to claim unfair dismissal in favour of a six-month qualifying service requirement.
Lord Sharp of Epsom, who tabled the bill change, said: “My amendment offers a better path. It reduces the qualifying period for unfair dismissal from two years to six months, a meaningful extension of protection for workers.”
The amendment to a six month qualifying period was passed with 304 votes in favour versus 160 against.
Lord Sharp said: “It also creates an initial period of employment following that six months in which a simplified process and lower compensation cap would apply. That strikes a fair balance, giving employers space to assess suitability while ensuring that bad-faith dismissals still carry consequences.”
He said it also removes the sweeping power given to the Secretary of State in the government’s clause to modify Section 98(4) of the Employment Rights Act, a power that could drastically shift the fairness test without proper parliamentary oversight.”
Brightmine employment law and compliance expert Stephen Simpson said: “Yesterday’s rejection of the proposal to introduce ‘day one’ protection against unfair dismissal in favour of a six-month qualifying service requirement to claim unfair dismissal is a significant moment for the Employment Rights Bill – and a timely reminder of the need to carefully consider the Bill’s impact on already stretched businesses.”
He said that Brightmine data shows day-one unfair dismissal rights as the most concerning proposed change in the Employment Rights Bill. More than three quarters (76.3 percent) of HR professionals said it would have a significant impact on their organisation, more than any other measure put forward.
“Under current rules, employers have more flexibility to manage underperforming staff within the first two years of service. If the changes go ahead, companies will still use probation periods but would need to demonstrate a fair process from the start. This increases pressure on HR teams to juggle multiple moving parts, particularly if line managers fail to follow the right process,” Simpson said.
“The Lords’ rejection highlights the risks of introducing sweeping reforms within Labour’s first six months in office, without proper consultation with employers. HR teams are already under significant pressure, and the risk of a spike in tribunal claims is real if not handled with care.”
