Labour's Day One Employment Rights | To Be Or Not To Be?

In a recent review of Labour's Employment Rights Bill, the House of Lords have rejected a provision that would have granted protection to workers, against unfair dismissal from day one of employment, something that formed one of the foundations of Labour's pledges within their manifesto. Instead, the House of Lords have backed an amendment to introduce a six-month qualifying period, replacing the government’s original proposal.

What was proposed?

The Labour-led Government had pledged to overhaul employment protections by:

• Removing the current two-year qualifying period for unfair dismissal claims.
• Granting day-one rights to all employees, including protections against unfair dismissal, sick pay and flexible working requests.

Why did the House of Lords reject It?

The Lords favoured a Conservative-backed amendment that replaces day-one rights with a six-month threshold. Their reasoning included:

• Concerns about hiring risks for employers, especially small businesses.
• Fears of a spike in employment tribunal claims, which are already facing backlogs.
• It prevented the need for a new legal structure.

Lord Sharpe of Epsom, who tabled the amendment, argued that the Bill “chokes opportunity” and “hardens the barriers” for those on the margins of the labour market.

Impact on Employers and Employees

The House of Lords’ rejection of day-one unfair dismissal rights in favour of a six-month qualifying period could reshape the employment landscape in several ways:

• Employees will still benefit from a reduced qualifying period (from two years to six months), which is a significant improvement over current law. However, without day-one rights, new hires remain vulnerable during their first six months.
• Employers will need to demonstrate a fair process earlier in the employment cycle, placing potential heavier burdens, especially on small businesses owing to the need to invest in progressive training for managers, especially immediate line managers to ensure compliance to avoid tribunal claims.

What’s next?

The Bill now returns to the House of Commons for further debate in a legislative game of “ping-pong.”  The Gvernment may attempt to reinstate day-one rights, but the Lords’ amendment has sparked a deeper conversation about balancing worker protections with business flexibility and the increased pressures that such changes could place on an already heavily burdened justice system.  

Assuming the amendment gets passed at the House of Commons, employers have a little more assurance than previously thought, with less upheaval to existing structures and practices. Final implementation is scheduled for 2027, which means there is still time for consultations and changes along the way.

Although the goalposts appear to be moving constantly with the Bill, it remains the case that careful recruitment, vigorous processes, strict monitoring and training for all managers on effective performance management will be key. 

Sills & Betteridge Employment Law Team provide specialist representation and advice from their large network of offices in Lincolnshire, Yorkshire and the East Midlands. For details of the team, their specialisms and contact details please see here.