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Government waters down landmark workers' rights bill in U-turn

After negotiations with unions and firms the Employment Rights Bill will no longer include protections for all workers against unfair dismissal from the first day in their job

[Angela Rayner spearheaded the workers' rights reform as Deputy PM]

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Angela Rayner spearheaded the workers' rights reform as Deputy PM(Image: PA)

Ministers have watered down a flagship bill to boost workers' rights in a manifesto breach.

After negotiations with unions and firms it will no longer include protections for all workers against unfair dismissal from the first day in their job. The promise was included in Labour's election winning manifesto.

Instead, workers will now need to have six months of service to claim unfair dismissal against their employer. This is still a reduction from the current qualifying period of 24 months Other key reforms in the landmark Bill - spearheaded by ex-Deputy PM Angela Rayner - including day one one rights to sick pay and paternity leave will still go ahead from April 2026 if the legislation becomes law.

Business leaders and trade unions met for two days this week to thrash out their differences and end the gridlock on the flagship bill. Firms had been arguing that day one rights for unfair dismissal would impact hiring.

Ministers were worried that if the legislation failed to make it onto the statute books before Christmas then new rights promised for April would be delayed. The bill is currently being held up in the House of Lords by Tory and Lib Dem peers as the Labour Government doesnt have a majority.

A Government source said: Its not something we do lightly. But its important that lots of things are still day one like sick pay and parental leave. There were also some concessions for unions in the talks, including lifting a compensation cap for successful unfair dismissal claims imposed by the Tories.

In an update on Thursday, the Department for Business and Trade (DBT) said: "The Government convened a series of constructive conversations between trade unions and business representatives. On the basis of the outcome of these discussions, the Government will now move forward on the issue of unfair dismissal protections in the Employment Rights Bill to ensure it can reach royal assent and keep to the Government's published delivery timeline."

It went on: "The discussions concluded that reducing the qualifying period for unfair dismissal from 24 months to six months (whilst maintaining existing day-one protection against discrimination and automatically unfair grounds for dismissal) is a workable package."

The Government insisted the amended package would "benefit millions of working people who will gain new rights and offer business and employers much-needed clarity".

The TUC's 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 benefiting from them from next April.

"Following the governments announcement, it is now vital that Peers respect Labours manifesto mandate and that this Bill secures Royal Assent as quickly as possible."

Nye Cominetti of the Resolution Foundation, said: "The Employment Rights Bill contains a welcome package of measures to improve conditions for those most likely to suffer from insecurity at work. But the reforms have risked being derailed by the new day one right to protection against unfair dismissal. 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.

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