The government has reversed its manifesto commitment to grant all workers the right to claim unfair dismissal from their first day of employment.
Ministers now intend to introduce this right after six months, following concerns raised by business groups that it could deter hiring.
The government has stated that this adjustment is to prevent delays to its employment legislation in the House of Lords, where it has faced opposition.
Other new day-one rights, including sick pay and paternity leave, are still slated to proceed, taking effect in April 2026.
Business groups have expressed support for the announcement, which followed discussions between major industry representatives and unions.
In a joint statement, the six business groups involved in the talks indicated that companies would be “relieved,” while also noting ongoing “concerns about many of the powers” included in the government’s employment package.
Currently, employers face increased legal requirements when dismissing employees who have been continuously employed for two years.
Employers must identify a fair reason for dismissal, such as conduct or capability, and demonstrate that they acted reasonably and followed a fair process.
The Labour Party had previously proposed to abolish this qualifying period entirely, and establish a new legal probation period, likely of nine months.
This pledge was a central element of Labour’s manifesto for the last general election, and a key provision of its Employment Rights Bill.
Labour had promised to establish “basic rights from day one to parental leave, sick pay, and protection from unfair dismissal.”
However, when asked if this change represented a breach of the Labour manifesto, Business Secretary Peter Kyle responded, “No.”
He asserted that the manifesto had pledged to “bring people together” and ensure that the legislation would “not pit one side against another.”
Speaking to broadcasters, Kyle stated that the compromise was reached by “unions and the employers,” and that it was “not my job to stand in the way of that compromise.”
The government now intends to implement unfair dismissal protection after six months rather than from day one, and to abandon the planned new legal probation period.
In recent weeks, the House of Lords has twice voted in favor of a six-month period, thus slowing the legislation’s passage through Parliament.
The Fair Work Agency, a new body responsible for overseeing the new rights, will also be established in 2026, the government announced.
Concerns had been raised that day-one rights could overwhelm an employment tribunals system already facing substantial backlogs.
One union source has informed the BBC that the “vast majority of unions” present at discussions were comfortable with introducing unfair dismissal protection only after six months.
The Trades Union Congress (TUC) welcomed the news, stating that 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.”
TUC General Secretary Paul Nowak called on the House of Lords to “respect Labour’s manifesto mandate” and ensure the legislation is passed as quickly as possible.
Kate Nicholls, chair of UK Hospitality, commented: “This is a pragmatic change that addresses one of hospitality businesses’ key concerns.”
The six-month waiting period would “give businesses much-needed breathing room and avoid further damage to employment opportunities,” she added.
However, Unite the Union, a significant Labour donor through affiliation fees paid by its members, criticized the U-turn, stating that the employment bill was now a “shell of its former self.”
Unite general secretary Sharon Graham added: “These constant row backs will only damage workers’ confidence that the protections promised will be worth the wait. Labour needs to keep its promises.”
The Conservatives described the U-turn as “humiliating” but added that the legislation was “still not fit-for-purpose.”
“The Business Secretary 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,” added shadow business secretary Andrew Griffith.