LORDS PRESS PAUSE ON DAY-ONE UNFAIR DISMISSAL RIGHTS
The House of Lords has voted to water down one of the Government’s headline employment law reforms: day-one protection from unfair dismissal. Instead, peers backed an amendment introducing a six-month qualifying period, passing it by 304 votes to 160.
The amendment, tabled by Lord Sharpe of Epsom, removes the original provision that would have allowed employees to bring unfair dismissal claims from the very start of their employment. In its place, the Lords propose a compromise: protection after six months’ service, followed by a distinct “initial period” where compensation would be capped and procedures simplified.
The argument? While earlier protection is broadly welcomed, Lord Sharpe warned that making dismissal claims available from day one could discourage hiring, especially of people with less experience or more unconventional CVs. His version, he says, strikes a better balance between boosting employee rights and keeping hiring flexible.
“The Lords have blinked - but this debate’s far from over.”
At present, employees need two years’ service to bring most unfair dismissal claims. Labour’s proposed reform would have reduced that to zero. The Lords’ version still marks a significant shift but reins it back to something many employers will find more manageable, especially given that six months broadly aligns with common probation periods.
The ball is now back in the Commons’ court. The Government may seek to restore its original version of the Bill, setting up a potential ping-pong between the two Houses. Given day-one rights were a specified manifesto commitment, the Salisbury dictates the House of Lords should not be amending it, and the Commons should be able to “force” it through. Indeed, at a time when the Government is faltering over other social justice questions, they may see an “easy win” in going harder on employment rights. In practice, whichever model prevails, we’re unlikely to see these changes land until 2027, with Royal Assent not expected before autumn 2025 and likely implementation delays after that.
What this means:
For employers: more breathing room than the original proposal, but still a significant shift from current rules.
For employees: earlier protection than ever before, just not quite from day one.
The Lords have blinked - but this debate’s far from over.
