The Employment Rights Bill (ERB) has stirred up fresh debate in the House of Lords, with its controversial proposal to abolish the two-year qualifying period for unfair dismissal claims. The government’s original aim was clear: to fulfil a manifesto pledge that unfair dismissal rights should apply from day one of employment. However, following the second reading in the Lords, that ambition has hit a significant roadblock.
Lords Vote for Six-Month Qualifying Period
Instead of the proposed “day-one” right, peers voted in favour of a six-month qualifying period, following amendments led by Conservative Peer, Lord Sharpe of Epsom. While acknowledging that the current two-year threshold is excessively long and unfair to employees, many in the Lords voiced concerns that scrapping it entirely could backfire—particularly for job creation.
The core argument? Removing the qualifying period altogether may make employers more hesitant to hire. Without time to assess whether a new hire is a good fit, employers could feel trapped, fearing immediate exposure to legal claims if things don’t work out. Several peers warned that this could act as a deterrent, especially for small businesses where each hiring decision carries greater risk.
The Complexity of Probation Period Proposals
One of the sticking points was the lack of detail on how probation periods would interact with the day-one dismissal rights. Probationary frameworks are notoriously inconsistent across businesses, and without clear statutory backing, they risk creating more confusion than clarity. The Lords argued that a six-month qualifying period strikes a better balance—giving employers enough time to evaluate new hires while still reducing the current two-year wait employees face to access basic protections.
Government Pushback
Baroness Jones of Whitchurch, speaking for the government, made it clear that these amendments undermine a key promise to extend unfair dismissal protection from day one. For the government, this is about restoring fairness and worker confidence, particularly in precarious job markets where security from the outset matters deeply to employees.
Opinion: Is Six Months the Sweet Spot?
There’s no denying that the existing two-year rule has long tilted the scales in favour of employers, often leaving workers vulnerable. The Lords are right to challenge it. But is day one too much, too fast?
A six-month qualifying period would arguably be a more pragmatic middle ground. It reflects a real shift towards fairness while still respecting the realities of running a business. Most employers can gauge suitability well within half a year—and if they can’t, that says more about their recruitment process than about the law.
That said, this compromise does pull the rug from under a clear and deliberate government pledge. In politics, breaking a manifesto promise—especially one that affects millions of workers—has consequences. While a six-month window might be more realistic, it risks being seen as a retreat from reform rather than a step forward.
What Happens Next?
With the House of Lords voting in favour of a six-month qualifying period, the amended version of the Employment Rights Bill will return to the House of Commons for further consideration. This sets the stage for a potential clash between the Lords and the government, which remains committed to introducing day-one unfair dismissal rights in line with its manifesto. The Commons may choose to reject the Lords’ amendment and reinstate the original proposal, triggering a process of parliamentary “ping-pong” where the two Houses negotiate the final wording. Until agreement is reached, the future of the qualifying period—and how quickly employees can access unfair dismissal protections—remains uncertain.
Action to Take Now
Employers should take proactive steps to review and update their internal processes and policies in anticipation of changes to the unfair dismissal qualifying period. While the final details and implementation date remain uncertain, it is clear that reform is forthcoming—whether in the form of a six-month or day-one qualifying period.
Early preparation will help your organisation adapt smoothly and mitigate risk once the new law takes effect.
At MD Law, we have experts on hand to support you and your business in the following ways:
- Reviewing your recruitment plans and helping you plan ahead.
- Assessing your onboarding process to ensure it is efficient and that new employees receive the necessary support and training without delay.
- Proactively monitoring employees during their probationary periods to identify any issues or concerns at the earliest opportunity.
- Conducting regular one-to-one meetings to ensure that any performance issues are addressed promptly.
- Assessing training needs to ensure there are no knowledge gaps that could result in poor performance.
- Advising on retention strategies and initiatives that may help lower staff turnover.
For further information or to book your consultation, please email info@mdlaw.co.uk or contact 0114 299 4890.
