The government has announced that it will drop the proposals for day-one unfair dismissal rights in the Employment Rights Bill and adopt instead a six-month qualifying period, in order to get the rest of the Bill passed by the House of Lords.
Following two defeats in the House of Lords over the removal of the unfair dismissal qualifying period, and facing increasing pressure from the business lobby, the government has reached what it describes as a “compromise” that has the backing of both unions and business representatives, in order to get the Employment Rights Bill through to Royal Assent.
The government announced in a press release on 27 November 2025 that day-one unfair dismissal rights will be dropped from the Bill, in favour of reducing the existing two-year qualifying period to six months. Cases where there is currently no qualifying period (such as certain automatically unfair dismissals) are unaffected. The government also intends to remove the power for future governments to use regulations to change the qualifying period, meaning that a further Act of Parliament would be required for future changes.
The press release also announced flatly that “the compensation cap will be lifted”. No further detail or explanation was given, and it is not clear whether “lifted” means “increased” or “removed”. This is an unexpected development.
An update on the Employment Rights Bill – GOV.UK – 27 November 2025
John Cook
