Changes to the promised “Day 1” right of protection from unfair dismissal

In its manifesto, the flagship employment policy of the Labour party was to introduce a ‘Day 1’ right for employees to bring an unfair dismissal claim, effectively removing the existing 2-year qualifying service requirement. This change was presented as a significant step towards strengthening worker protections and ensuring that all employees, regardless of length of service, could challenge potentially unjust dismissals.

Ability to claim Unfair Dismissal

The Government had indicated that the ability to claim unfair dismissal from day 1 would be subject to the right of the employer to dismiss an employee during a probationary period, potentially subject to the employer following a simplified dismissal procedure.  This received criticism on the basis that a simplified procedure for dismissing an employee during the probationary period would cause confusion, and introduce an unnecessary additional hurdle, for employers.  The House of Lords therefore sought to amend the Employment Rights Bill to simply reduce the qualifying period of service to bring a claim for unfair dismissal to 6 months.

What has changed?

On 27 November 2025, the Government confirmed that it would accept the proposal of the House of Lords, and would amend its manifesto commitment and would not remove totally the qualifying period of service to claim unfair dismissal, but would reduce it to 6 months. This adjustment represents a shift toward balancing enhanced employee rights with employer concerns about flexibility and probationary periods.

The Government has defended its revised position on the basis of concerns expressed during consultations regarding the Employment Rights Bill, noting in particular the potential operational and financial strain that the proposed reform could impose on small businesses. It was argued that the reform “would not be legislation that pits one side against another,” but rather an attempt to bring people together and strike an appropriate balance between strengthening employee rights and maintaining workable rules for employers.

What does that mean for employees?

As a result, employees have a reduced level of security available during the early stages of employment, particularly during probationary periods. For employers, the revised six-month qualifying period provides greater flexibility in managing new starters, particularly for small businesses concerned about the financial implications of potential claims.

The Government has confirmed that the remaining day-one rights, namely those relating to statutory sick pay and paternity leave, will proceed unaffected and are expected to come into force in April 2026.

Returning to unfair dismissal, at the same time as announcing its ‘U-turn’ on unfair dismissal rights the Government announced that the compensation cap for unfair dismissal claims would be lifted.  The current cap is the lower of 52 weeks’ gross pay or £118,223.

It is unclear whether the cap of 52 weeks’ gross pay will be removed but the overall cap of £118,223 will remain, or whether the cap of £118,223 will be lifted, or both.  However, the rumour is that the upper cap of £118,223 will be retained and the 52-week limit will be removed.  So, on this proposed change, watch this space!!

If you would like to discuss anything related to the Employment Rights Bill, please contact a member of the Employment team.

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