Parliament's upper chamber has delivered a significant blow to the government's Employment Rights Bill. By a clear margin of 304 to 160, peers voted down Labour's proposal to introduce unfair dismissal rights from day one, opting instead to support an amendment requiring a six-month qualifying period. 

This parliamentary pushback represents a major shift in the Employment Rights Bill's trajectory and creates immediate uncertainty for employers across the UK. The proposed changes represent employers' biggest concern among all employment law reforms in the pipeline. 

Employment Rights Bill: Original Day-One Dismissal Proposals Explained 

Labour's original manifesto promised workers the right to claim unfair dismissal from their first day of employment. The legislation did outline an "initial period of employment" allowing dismissals under certain criteria, essentially functioning like an extended probationary period. 

During this time, employers could terminate employment if they applied a simplified process and the reason related to conduct, capability, legal restrictions, or other significant factors. While early versions didn't define the exact duration, some believed this probationary period might last up to nine months. 

However, the amendment put forward by Lord Hunt of Wirral and Lord Vaux of Harrowden avoids dealing with these complexities altogether. Rather than creating new legal structures around an initial employment period, it simply reduces the current two-year qualifying period to six months. 

Why UK Employers Fear Unfair Dismissal Law Changes 

The existing two-year qualifying period is deeply embedded in the way HR teams and employment lawyers manage dismissals. Taking away this threshold could open the door to a surge in tribunal claims and high compensation payouts, even for staff with minimal service. 

Defending dismissal decisions from an employee's first day would place a heavy legal and administrative strain on employers, requiring major adjustments to current HR procedures and probationary period management systems. 

Many unknowns remain about how the "light touch" procedures would work in practice, creating additional uncertainty for businesses trying to prepare their probationary period processes. 

Employment Rights Bill: What Happens Next in Parliament 

The bill is now headed back to the House of Commons, where MPs might choose to overturn the Lords' amendment and reinstate the original proposal for day-one unfair dismissal rights. 

Should that happen, the final version of the legislation could reintroduce a more complex initial employment period, possibly lasting more than six months, effectively creating a statutory probationary period framework. 

The government has indicated these changes will take effect in 2026, providing businesses with time to prepare regardless of the final outcome. Additionally, ACAS codes of practice, which provide practical guidance on implementing these employment law changes, can take up to one year to develop and publish. 

Getting Your Business Ready for Upcoming Changes to Employment Law 

Despite the 2026 implementation timeline, smart employers should begin reviewing their practices now rather than waiting for final clarity. The lead time provides an opportunity to embed new processes gradually, ensuring organisations adapt smoothly when the changes take effect. 

The key focus should be effective use of probationary periods. These closely mirror the proposed initial employment period structure, where dismissals for performance or conduct issues could occur with reduced legal exposure. Businesses that strengthen their probationary period procedures now will be better positioned to adapt smoothly, no matter how the final legislation takes shape. 

Consider updating your employee handbooks with clear probationary period terms, training managers on proper dismissal procedures during the probationary period and establishing clear performance management protocols that can withstand tribunal scrutiny from an employee's first day. 

This latest move in Parliament highlights the continuing debate between safeguarding employee rights and preserving flexibility for employers in the changing UK employment scene. 

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