Key Takeaways
- The UK government has reversed its decision to offer all workers the right to claim unfair dismissal from their first day in a job, instead introducing the right after six months.
- The government cites the need to prevent delays in the House of Lords as the reason for the U-turn, following opposition from business groups.
- Other day-one rights, such as sick pay and paternity leave, will still be introduced in April 2026.
- Business groups have welcomed the announcement, while some unions have expressed disappointment and concern that the government is not keeping its promises.
Introduction to the U-Turn
The UK government has made a significant U-turn on its manifesto commitment to offer all workers the right to claim unfair dismissal from their first day in a job. Instead, the government now plans to introduce the right after six months, following concerns from business groups that the original plan would discourage firms from hiring. The government has argued that this change is necessary to prevent delays in the House of Lords, where the employment legislation has run into opposition. This decision has been met with a mixed reaction from business groups and unions, with some welcoming the announcement and others expressing disappointment and concern.
Current Employment Legislation
Currently, employers in the UK face additional legal hurdles if they want to sack employees who have been in their role continuously for two years. They must identify a fair reason for dismissal, such as conduct or capability, and show that they acted reasonably and followed a fair process. The Labour government had planned to abolish this qualifying period completely, alongside a new legal probation period, likely to have been nine months. This was a central pledge in Labour’s manifesto ahead of last year’s general election and a key plank of its Employment Rights Bill. However, the government has now decided to introduce unfair dismissal protection after six months instead of day one, and ditch the new legal probation period.
Reaction to the U-Turn
The reaction to the U-turn has been mixed, with business groups welcoming the announcement and some unions expressing disappointment and concern. The six business groups involved in the discussions said companies would be "relieved" by the announcement, but added that firms still had "concerns about many of the powers" contained in the government’s employment package. The Trades Union Congress (TUC) welcomed the news, adding that 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." However, Unite the Union, a major Labour donor, hit out at the U-turn, saying that the employment bill was now a "shell of its former self" and that Labour needs to keep its promises.
Implications of the U-Turn
The implications of the U-turn are significant, with some arguing that it will give businesses much-needed breathing room and avoid further damage to employment opportunities. Kate Nicholls, chair of UK Hospitality, said that the six-month waiting period would "give businesses much-needed breathing room and avoid further damage to employment opportunities." However, others have expressed concern that the U-turn will damage workers’ confidence that the protections promised will be worth the wait. The Conservatives have called the U-turn "humiliating" and argued that the legislation is "still not fit-for-purpose." The shadow business secretary, Andrew Griffith, added that Keir Starmer must "grow a backbone, stand up to his union paymasters and ditch every single job-destroying anti-growth measure in the employment rights bill now."
Future of Employment Legislation
The future of employment legislation in the UK is uncertain, with the government’s U-turn on unfair dismissal rights likely to have significant implications for workers and businesses. The Fair Work Agency, a new body tasked with overseeing the new rights, will be set up in 2026, and the government has announced that other day-one rights, such as sick pay and paternity leave, will still be introduced in April 2026. However, the U-turn has raised questions about the government’s commitment to protecting workers’ rights and its ability to deliver on its promises. As the legislation continues to make its way through Parliament, it remains to be seen how the government will balance the needs of businesses and workers, and what the final outcome will be for employment rights in the UK.