The government’s flagship Employment Rights Bill is designed to introduce sweeping changes to UK employment law – including a proposed right for employees to claim unfair dismissal from day one of employment.
However, the House of Lords has repeatedly rejected the government’s approach, insisting instead on a six-month qualifying period before an employee can claim unfair dismissal. This back-and-forth between the Lords and the House of Commons means continued uncertainty remains for employers preparing for upcoming changes.
Why the Lords’ position matters
The Lords’ insistence on a six-month qualifying period instead of the Government’s proposed day-one right is significant:
- It may give employers some breathing space, if the Commons eventually concedes, as it means new hires won’t be able to claim unfair dismissal from day one.
- However, if the Commons pushes back and day-one rights are reinstated, HR teams will need to charge ahead with their review of probation processes, onboarding practices, and dismissal procedures immediately to ensure compliance.
What it means for HR teams now
Sarah Kerr HR Technical Consultant with employee relations experts AdviserPlus summarises:
1. Policy readiness: HR teams must be ready for either outcome. If day-one rights go ahead, probationary and dismissal processes will need immediate review. If the six-month period stands, timings and communications still need clear planning.
2. Increased risk of employee-relations cases: The uncertainty itself may trigger more disputes, particularly around probationary dismissals or claims of procedural unfairness.
3. Tribunal system pressure: Even if new rights are introduced, the tribunal system is already heavily back-logged. So any surge in claims may overwhelm the system and undermine the protections the reforms seek to strengthen.
Broader labour-market implications
From the employers’ perspective:
- A day-one right to unfair dismissal may lead to heightened risk aversion, further slowing recruitment at a time when unemployment is high and making it even harder for young people and first-time jobseekers to access opportunities.
- By potentially damaging business confidence, in spite of being a manifest pledge, the Commons need to carefully consider whether the Employment Rights Bill is a risk to the UK’s economic future
- On the flip side, from a worker rights perspective: an estimated 1.2 million UK workers would have gained protection under day-one dismissal rights, according to analysis by The Guardian.
Other key reform areas to watch
- Guaranteed hours for zero- and low-hours workers: The Lords backed amendments requiring employers to offer guaranteed hours after an initial reference period, but allow opt-out. This means that contract templates and scheduling systems may need updating.
- Right to be accompanied at hearings: The Bill is also looking at widening the right to be accompanied in disciplinary or grievance hearings – this may raise more procedural challenges and employee relations cases.
Practical steps HR should take now
HR needs to keep a close eye on all of these reforms and be ready to update policies accordingly including:
- Audit probation and dismissal processes: Map out current procedures, identify weak spots (e.g., lack of documentation, weak performance reviews) and prepare to adapt contract templates and scheduling systems that may need updating.
- Update communication templates: Wherever the threshold lands (day one or six months), clear messaging to managers and new hires is essential.
- Monitor legislation progress closely: The Bill’s final text is still unresolved. Watching for secondary regulations, guidance and the outcome of the Commons-Lords exchanges is critical.
- Ensure flexibility in planning: Given the uncertainty, build scenarios into your HR planning — one assuming day-one rights, one assuming six months, and one for transition phase.
- Support managers: Provide training or briefings on how to handle dismissals, probation reviews, and potential claims, especially given the risk of increased employee-relations cases.
- Factor in resource/administration impact: Reforms such as guaranteed hours or expanded accompaniment rights may add administrative burden. Plan for workload and system updates now.
Final thought
The tug-of-war between the Commons and Lords over unfair dismissal rights is more than political theatre – it carries real implications for employers, HR professionals and workers alike. Whether day-one rights prevail or a six-month qualifying period is adopted, the outcome will demand prompt operational readiness.
For HR teams, Sarah Kerr’s message is clear: “Hold off on major policy overhauls until the Bill’s final form is clear but stay alert. The eventual outcome will likely bring notable shifts in dismissal rights and contract flexibility that will require swift operational updates”.
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