The Labour government has performed a significant U-turn on a key election pledge, abandoning its promise to protect workers from unfair dismissal from their very first day in a new job.
A Compromise on Workers' Rights
In a major dilution of the flagship Employment Rights Bill, Business Secretary Peter Kyle announced that the qualifying period for unfair dismissal claims will be reduced to six months, rather than being abolished entirely. This marks a substantial reduction from the current two-year requirement but falls short of the 'day one' protection prominently featured in Labour's 2024 manifesto.
Mr Kyle defended the compromise, stating that 'compromise is strength' and an 'art' lost in recent politics. He hailed the six-month period as a 'great success' for the economy, workers, and employers alike, representing what ministers call a 'workable package' that will benefit millions.
Mixed Reactions from Business and Unions
The business community has largely welcomed the revised policy. The Confederation of British Industry (CBI) expressed relief, stating the six-month period is 'simple, meaningful and understood' and crucial for business confidence to hire. The Resolution Foundation think tank called it a 'sensible move' that strikes the right balance, preventing the UK from lurching 'from one extreme to the other' and potentially putting firms off hiring.
However, the trade union response has been fiercely critical. Sharon Graham, general secretary of Unite, declared the bill had become a 'shell of its former self', citing the failure to also ban 'fire and rehire' and zero-hours contracts. She warned that these 'constant row backs' damage workers' confidence that promised protections will materialise.
What Stays in the Bill?
Despite the U-turn on unfair dismissal, several significant worker protections within the bill remain intact and are scheduled to come into force. These include:
- The abolition of statutory probation periods.
- The right to receive sick pay from the first day of employment.
- The introduction of new paternity leave entitlements from April 2026.
- A ban on zero-hours contracts, a measure that has faced opposition in the House of Lords.
The TUC, while disappointed, has urged the House of Lords to allow the rest of the legislation to pass without further delay. General Secretary Paul Nowak emphasised that the bill is still essential for creating better quality, more secure jobs and that getting rights like day-one sick pay onto the statute book is now the absolute priority.
The legislation, a cornerstone of Labour's election platform, has been caught in 'parliamentary ping pong' with the Lords, who had objected to the original day-one dismissal rights, arguing it would deter hiring.
