Labour has abandoned plans to ditch the qualifying period for unfair dismissal protection, which currently stands at 24 months, and instead reduce it to six months as the Employment Rights Bill edges closer to Royal Assent.
Prior to the decision, the Bill had been through several rounds of parliamentary ping pong with day-one unfair dismissal rights proving a bone of contention after concerns were raised that it may deter employers from hiring.
The Government reached its decision after a series of “constructive conversations” between trade unions and business representatives. It claimed that coming to an agreement on unfair dismissal protections, meant that the Bill could now reach Royal Assent and keep to the Government’s published delivery timeline, delivering day-one rights to sick pay and paternity leave in April 2026.
The news was welcomed by retail trade bodies.
ACS chief executive James Lowman said: “We welcome the Government’s decision to change its qualifying period for unfair dismissal from day one to six months. This compromise reflects the concerns of retailers and provides a clearer, fairer framework for businesses and workers. Local shops play a vital role in creating secure, flexible jobs that support communities and the wider economy. We are committed to working constructively with Government as further consultation happens.”
BRC Chief Executive, Helen Dickinson, said:
“This is an important, practical step in creating an Employment Rights Bill that will protect employment opportunities as well as employees. We are pleased to see that Government has listened, and this is proof that meaningful engagement between businesses, trade unions and Government can lead to positive outcomes for everyone.
“We now need similar engagement on other areas of the Bill which are of significant concern. For example, Guaranteed Hours, where current proposals would make it harder for retailers to offer local, flexible, and part-time jobs.
“The delay to the Bill’s Royal Assent must not result in a compressed implementation roadmap. The Government has asked business to engage with its consultations on the Bill and it is crucial that the implementation timeline allows for quality engagement with high-employment industries to ensure the Bill is fit for purpose, protecting employment opportunities as well as employees.”
Sharon Graham, General Secretary at Unite the Union, 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. The Labour Party needs to keep its promises.”
The Trades Union Congress said: “The Employment Rights Bill is essential to better quality, more secure jobs for millions of workers. The absolute priority now is to get these rights – like day one sick pay – on the statute book so that working people can start benefitting from them from next April. Following the government’s announcement, it’s now vital that Peers respect Labour’s manifesto mandate and that this Bill secures Royal Assent as quickly as possible.”
