Employment Rights Bill: House of Lords votes against day-one protection from unfair dismissal

Following a vote by the House of Lords, Labour’s promised day-one protection from unfair dismissal may now be replaced by a six-month qualifying period.

If the House of Lords accepts the amendment, the change would mark a huge U-turn in Labour’s commitment to provide all workers with immediate protection from unfair dismissal.

Changing the qualifying period

Introduced by the Shadow Business and Trade Minister, Lord Sharpe of Epsom, the proposal was approved by 304 votes to 160.

While the qualifying period would still represent a reduction from the current two-year timeframe, it remains a far cry from Labour’s original vision set out in the Employment Rights Bill.

Sharpe stated that this change strikes a fairer balance and provides employers the ‘space to assess suitability while ensuring that bad-faith dismissals still carry consequences’.

Confused and counterproductive

Sharpe explained his view further, commenting that the intention to protect workers was ‘commendable’, but the current proposed approach to unfair dismissal and the planned introduction of a statutory probationary period were both ‘confused and counterproductive’.

He added that there will always be a risk with hiring, raising concerns that the bill heightened the challenge and could ultimately disincentivise businesses from recruiting.

It’s worth noting that when the bill was initially announced, some experts expressed similar concerns around the day-one protection from unfair dismissal, echoing that it could have adverse implications on hiring.

In fact, Dan J. Grace, Director of International HR Consulting at IRIS Software Group, commented on this recruitment risk in a previous Employment Rights Bill article, stating: “Following the change, employers may express greater caution when hiring and take fewer risks on candidates who don’t have the experience and skills but show potential.”

What are the next steps?

Currently, the bill is going through the report stage in the House of Lords.

Following the third reading, any amendments will need to be approved by the House of Commons.

The Employment Rights Bill roadmap was only released recently, with the changes to unfair dismissal due to take place in 2027, which you can learn more about in our recent blog.

In relation to the most recent development, Dan told us: “Although not unexpected, we continue to see fluctuations in how the Employment Rights Bill will be implemented and the changes this will bring to the UK employment market.

“The message remains clear to me: employers must act and have the right best practices in place to ensure they don’t have ‘bad actors’ in their workforce.

“Hire the right candidate and have a strong process around probation management.

“If this amendment passes, probation management will be more important than ever and ensuring your management team adhere to the principles of probation management will help reduce risk in your business.”

Stephanie Coward

Managing Director, HCM

Stephanie Coward is Managing Director for HCM at IRIS, where she leads the strategy, innovation and growth of the organisation’s HR and payroll portfolio. She is responsible for positioning IRIS as a trusted partner to HR professionals and ensuring its solutions support the evolving needs of modern workforces.

With more than 25 years’ experience in the technology sector, Stephanie brings deep commercial and operational expertise, with a passion for improving the employee experience through technology.

Stephanie is committed to advancing IRIS’ HCM offering and helping organisations build more resilient, empowered workforces.