The British government has performed a significant U-turn on its flagship employment policy, abandoning its much-touted pledge to grant workers protection from unfair dismissal from the very first day in a new job. Instead, ministers have now set the qualifying period for unfair dismissal claims at six months, a compromise that has sparked fierce debate among unions, business groups, and political opponents alike.
Announced on November 27, 2025, the reversal marks a substantial watering down of one of Labour’s key 2024 election manifesto promises. The Employment Rights Bill, originally designed to bring sweeping changes to workplace protections, has been mired in parliamentary wrangling for months. According to BBC News, the government’s decision to back away from immediate day-one protection came after business groups voiced concerns that such a move would discourage firms from hiring, especially in uncertain economic times.
Currently, workers in the UK must be employed continuously for two years before they can bring an unfair dismissal claim against their employer. Labour’s initial plan was to scrap this qualifying period entirely, offering immediate protection and introducing a new statutory probation period—likely to have been nine months. However, after sustained opposition in the House of Lords and pushback from industry, the government settled on a six-month qualifying period and dropped the probation proposal altogether.
Despite the climbdown on unfair dismissal, other day-one rights—such as sick pay and paternity leave—will still come into force in April 2026. The government has also announced the creation of the Fair Work Agency, a new body tasked with overseeing the implementation of these rights, set to launch in 2026.
Business groups have largely welcomed the compromise, describing it as a pragmatic solution that balances worker protection with the realities of running a business. The Confederation of British Industry (CBI) stated, “Businesses will be relieved that the government has agreed to a key amendment to the Employment Rights Bill, which can pave the way to its initial acceptance. This agreement keeps a qualifying period that is simple, meaningful and understood within existing legislation. It is crucial for businesses’ confidence to hire and to support employment, at the same time as protecting workers.”
Similarly, the Resolution Foundation, an independent think tank focused on improving living standards, called the change a “sensible move that will speed up the delivery of improvements to working conditions and reduce the risk of firms being put off hiring.” Nye Cominetti, principal economist at the Foundation, noted, “The UK currently has one of the longest qualifying periods for protection, which needs to come down. But scrapping it entirely would have meant lurching from one extreme to the other and putting firms off hiring new workers. This sensible move to a six-month qualifying period will bring the UK into line with other countries, deliver tangible improvements to working conditions, and help the Government move forward with other key aspects of the Employment Rights Bill.”
However, the response from trade unions has been far less enthusiastic. Sharon Graham, general secretary of Unite the Union, was withering in her assessment: “With fire and rehire and zero-hours contracts not being banned, the bill is already unrecognisable. These constant row backs will only damage workers’ confidence that the protections promised will be worth the wait. Labour needs to keep its promises.” Unite, a major Labour donor through its members’ affiliation fees, has repeatedly warned that the government’s retreat on worker protections risks undermining trust and morale among employees.
The Trades Union Congress (TUC) adopted a slightly more conciliatory tone but nevertheless emphasized the urgency of getting the remaining rights on the statute book. TUC General Secretary Paul Nowak said, “The Employment Rights Bill is essential to better quality, more secure jobs for millions of workers across the economy. The absolute priority now is to get these rights—like day one sick pay—on the statute book so that working people can start benefitting from them from next April. Following the government’s announcement, it is now vital that peers respect Labour’s manifesto mandate and that this bill secures royal assent as quickly as possible.”
Business Secretary Peter Kyle, facing questions about whether the change constituted a breach of Labour’s manifesto, insisted otherwise. He argued that the party’s real commitment was to “bring people together” and to ensure the legislation did not “pit one side against another.” Speaking to broadcasters, Kyle explained, “The compromise had been found by unions and the employers and it was not my job to stand in the way of that compromise.”
Still, the political fallout has been intense. Conservative critics have seized on the reversal as evidence of Labour’s weakness. Shadow business secretary Andrew Griffith described the U-turn as “humiliating,” adding, “Keir Starmer must grow a backbone, stand up to his union paymasters and ditch every single job-destroying anti-growth measure in the employment rights bill now.” Griffith also criticized Labour’s broader economic record, saying, “Rachel Reeves’ benefits street budget contained little good news for businesses already struggling under the weight of last year’s jobs tax. Inflation and unemployment are set to be higher for longer, wage costs are going up and business rate reliefs are being cut. It’s hard to see anything in this budget which will boost confidence or stop the exodus of young people and wealth creators leaving.”
From the business community’s perspective, the six-month period offers “much-needed breathing room,” as Kate Nicholls, chair of UK Hospitality, put it. She told BBC News, “This is a pragmatic change that addresses one of hospitality businesses’ key concerns.” The new waiting period, she said, would “give businesses much-needed breathing room and avoid further damage to employment opportunities.”
Behind the scenes, the government’s decision was also influenced by fears that day-one rights could overwhelm an already backlogged employment tribunal system. According to one union source cited by BBC News, the “vast majority of unions” present at the discussions were comfortable with the six-month compromise, seeing it as a workable step forward given the political realities in Parliament.
Nevertheless, the journey of the Employment Rights Bill has been anything but smooth. Caught in a prolonged game of parliamentary “ping pong” with the House of Lords, the bill has seen its most ambitious provisions repeatedly challenged and, in some cases, diluted. Last month, peers objected to both the day-one unfair dismissal rights and the move to force employers to offer guaranteed hours, arguing that such measures could deter hiring and did not reflect the preferences of all workers.
As the bill moves towards its final passage, all sides agree on one thing: the stakes are high for millions of working people. Whether the compromise will deliver the promised improvements to job security and working conditions—or simply leave workers feeling short-changed—remains to be seen. What’s certain is that the debate over the balance between worker protections and business flexibility is far from over.
