Six-month unfair dismissal right to replace Labour’s day-one pledge

Britain’s government has dropped plans to give workers the right to claim unfair dismissal from the first day of a job, opting instead for protection after six months. The change follows weeks of pressure from business groups and a series of defeats in the House of Lords, and is intended to secure passage of the flagship Employment Rights Bill.      

Under current law, most employees must complete two years of continuous service before they can bring an ordinary unfair dismissal claim, though some protections such as whistleblowing safeguards apply earlier. Labour had pledged to abolish that waiting period entirely and introduce a statutory probationary period, creating what it called “day one” protection. Those proposals have now been abandoned in favour of a six-month qualifying period and no new statutory probation.    

Ministers say the compromise was reached after talks between unions and six major business organisations, including the Confederation of British Industry, the British Chambers of Commerce and the Federation of Small Businesses. The government argues the revised approach is simpler, preserves hiring confidence, and unblocks legislation that was at risk of stalling.    

The decision has drawn mixed reactions across Westminster and industry. The Trades Union Congress said its priority is to secure other reforms in the Bill, notably day-one sick pay and paternity leave, which ministers still plan to implement from April 2026. Unite, however, criticised the retreat, warning that repeated concessions undermine confidence in the wider package. Conservative leaders labelled the reversal humiliating but maintained that the Bill remains damaging for growth.    

For hospitality businesses, the amendment lands at a moment of tight margins and rising statutory costs. UKHospitality, whose members include pubs, restaurants, hotels and fast-food operators, had lobbied for a six-month threshold, arguing that immediate unfair dismissal rights would deter recruitment and make seasonal hiring harder. Its chair, Kate Nicholls, welcomed what she called a pragmatic change that gives firms breathing room, while stressing that the Bill will still add cost pressures to an industry already facing wage, rates and other increases. She urged ministers to consider delaying new day-one sick pay rules for six months to avoid further hits to employment.    

Employment lawyers say the revised plan is less radical than Labour’s original promise but still significant. Experts at Pinsent Masons note that a six-month qualifying period has historical precedent and should be easier for employers to manage than a wholesale move to day-one claims. They argue businesses will need more robust recruitment and induction processes, clearer probation arrangements, and better manager training to address performance issues early.  

Another area to watch for employers is compensation. The government has said the current cap on unfair dismissal compensation will be lifted, though it has not clarified whether this means raising the limit or removing it entirely. Lawyers suggest the change could increase exposure for businesses and may lead to more claims being brought to tribunal, potentially worsening an already severe backlog. In some cases, hearings are reportedly being listed years in advance, highlighting the strain on the system.    

For fish and chip shops and wider hospitality, the practical impact will depend on how quickly firms can adapt. A shorter six-month route to unfair dismissal claims gives employees earlier leverage, while leaving operators with a narrower window to assess fit, capability and attendance before full protection applies. In a sector that relies heavily on new starters, younger workers and seasonal peaks, businesses may respond by tightening probation reviews, documenting training more carefully, and investing in frontline management skills to reduce risk.    

The broader Employment Rights Bill still contains other major reforms, including restrictions on exploitative zero-hours contracts and “fire and rehire” practices, and the creation of a Fair Work Agency to oversee enforcement. Most measures are not expected to take effect before 2026, with further consultation planned on the detail. For hospitality leaders, that timetable offers time to prepare, but also prolongs uncertainty about staffing models and compliance costs.    

The Bill returns to Parliament in early December, where amendments reflecting the six-month compromise are expected to be approved and sent back to the Lords. If passed, it would mark one of the most substantial overhauls of workplace rules in a generation, reshaping the balance between flexibility for employers and security for staff across the hospitality economy.