Solicitor Dayna Rodrigues, in our Employment Law team, explains the newly announced changes to the Employment Rights Bill.
On 27 November 2025 the government announced that it would be dropping one of its flagship proposals from the Employment Rights Bill (“ERB”). The ERB contains numerous proposed amendments by the Labour government to the law relating to employment rights and the government had previously committed to introducing the day one right for employees to claim unfair dismissal.
In an arguably surprising turn of events, the government has abandoned this proposal and instead proposes that employees will need to have only six months qualifying service in order to pursue a claim for unfair dismissal.
At present, employees are required to have been continuously employed for a minimum of two years (with the same employer) in order to bring an unfair dismissal claim. This means that an employer can generally wait for almost up to 24 months and still dismiss an employee without fear of facing a claim of ordinary unfair dismissal. In practice therefore employers have been able to wait almost two years before coming to a firm decision about an employee’s suitability for a role and/or simply avoid having to identify a potentially fair reason for dismissal or follow a fair process.
Whilst the amendment no longer means that employees will have a day one right to claim unfair dismissal, the change is still significant, reducing the qualifying period by 75%.
The existing day one right to be protected against discriminatory and other automatically unfair reasons for dismissal remains in place.
The government has also confirmed that it intends to make this change to the qualifying period for unfair dismissal by way of primary legislation meaning that it will be arguably more difficult for future governments to (re)amend it.
Yesterday’s announcement also confirms that the government plans to lift the cap on unfair dismissal compensation, although further details as to the extent of this ‘lift’ are yet to be released. At present, if an employee successfully brings a claim for unfair dismissal any compensation awarded is largely broken down into two elements; the basic award (normally calculated in the same way as statutory redundancy pay) and the compensatory award. The compensatory award is ordinarily capped and at present this cap is the lower of 52 times a week’s pay and £118,223. This figure is typically reviewed and updated by the government yearly in April.
The recent amendment to the ERB has not impacted other day one rights that the Labour government plans to introduce, namely the day one rights to be entitled to statutory sick pay and paternity leave, which are due to come into effect in April 2026.
Final consideration of amendments to the ERB is currently underway. The Bill will next move to Royal Assent after which it can come into effect. You can track the progress of the ERB here.
Employment Law claims can be complex and difficult to bring successfully. Our Employment Law team advises employees and employers on their legal position and options including in relation to bringing or defending employment tribunal claims.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
