Government drop day one unfair dismissal plans
The government have dropped their plans to implement day one unfair dismissals rights through the Employment Rights Bill.
The U-turn comes after opposition from the House of Lords, who twice refused to grant approval to the Bill.
What was supposed to happen?
Day one unfair dismissal rights were a major part of the Labour Party’s manifesto commitments when they were elected in 2024. Within 100 days of coming to power, the put the Employment Rights Bill in motion which, alongside day one unfair dismissal rights, brought about a host of new employee rights in the workplace.
However, their plans have stalled in recent months, as the House of Lords has twice refused to put their consent to the Bill, setting it into ‘ping-pong’. The Lords argued that day one unfair dismissal rights, as well as changes to zero hour contract and trade union rules, would be of serious detriment to businesses – particularly SMEs.
What is the change and why now?
The government have now announced that they will be amending their plans, to provide a six-month grace period for unfair dismissal rights.
Whilst this is considerably shorter than the current two-year period, The HR Dept welcomes this change as it provides an element of clarity for SMEs across country. However, we will eagerly await further clarity on other parts of the Bill, which are causing confusion and uncertainty for many business owners.
The decision was announced as the government attempt to get agreement from the House of Lords, and push the Employment Rights Bill through to Royal Assent. With the first major raft of changes expected to come in April 2026, this should at least provide SMEs with some clarity on the actions they need to begin taking.
What about the rest of the Employment Rights Bill?
The rest of the Bill is expected to remain unchanged – although there is still some opposition to the changes to zero-hour contracts and trade union rules within the House of Lords. We will now wait and see how it progresses, and The HR Dept will keep you up to date with the latest news.
What should you be doing to prepare?
There is huge compliance requirements, process changes and cost implications for SMEs from the Employment Rights Bill.
The best way to navigate the incoming changes is to start preparing now. That includes reviewing your policies, contracts and processes to ensure they are ready to align to the new rules.
Get in touch with us today for local, tailored HR support to guide your business through.
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