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Employment Rights Bill Update
The Government has dropped plans for day-one unfair dismissal rights and will instead introduce a six-month qualifying period. Compensation caps for unfair dismissal will also be lifted, increasing potential financial risk for employers. The proposed statutory probation framework (“initial period”) is expected to be removed — meaning businesses must rely on strong internal probation management. Employers should review onboarding, documentation and early performance practices now to stay protected.
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Employment Rights Bill Update: Government Drops Day-One Unfair Dismissal Plan
December 2025
After months of back-and-forth between the Government, the House of Lords and business leaders, a major shift has now taken place in the Employment Rights Bill negotiations.
On 27 November 2025, the Government confirmed it will drop its manifesto pledge to introduce day-one unfair dismissal rights. Instead, it has agreed to retain a qualifying period, but significantly reduced from the current standard.
What’s changed?
The Government will accept the House of Lords’ amendment to introduce a:
Six-month qualifying period for ordinary unfair dismissal
This will form part of the Bill when it returns to the House of Commons on 8 December 2025.
The Government has stated that this change was necessary to ensure it can deliver the Bill on time under its Roadmap for Delivering Change
Further consultation will now take place on how this reform will be implemented in practice.
Measures to strengthen worker protection
To rebalance this shift, the Government has stated:
The qualifying period for unfair dismissal can only be changed by primary legislation
The compensation cap on unfair dismissal awards will be lifted
It is not yet confirmed what this means — however, early indication suggests the 52-week cap on compensatory awards could be removed.
That would represent a significant financial and litigation risk for employers.
What about statutory "initial periods"?
There are reports that the Government will now remove the Bill’s proposed statutory probation period (the “initial period”), which would have allowed light-touch dismissals for non-redundancy reasons.
If removed, the legislative framework will rely even more heavily on robust employer-led probation processes.
What remains uncertain?
The Government has not yet confirmed whether it will accept other Lords amendments — including:
The strengthened right for zero and low hours workers to receive guaranteed hours offers where patterns form
We expect this to be clarified during the December debates.
What employers need to do now
While six months offers more protection than day-one rights, it is still a dramatic reduction from the current two-year threshold.
This means:
✔ Performance management must begin from day one
✔ Probation reviews must be structured, documented and regular
✔ Early capability concerns must be addressed quickly
✔ Hiring decisions must be well-evidenced
This reform puts the spotlight on probation management as a core legal protection for employers.
Those with informal or high-turnover approaches should review processes urgently.
Enablement Group can help
We support SMEs to:
Strengthen onboarding and performance management
Refresh probation policy and documentation
Train managers to deliver fair, confident conversations
Reduce tribunal risk exposure
📩 hello@enablementgroup.co.uk
We will continue to share updates as the Bill progresses toward Royal Assent.
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