House of Lords Stands Firm on Employment Rights Bill as Unfair Dismissal Debate Intensifies
The government’s flagship Employment Rights Bill has hit another roadblock, as the House of Lords stood firm on key amendments rejected by MPs reigniting the debate over the future of unfair dismissal rights and wider workplace protections.
Peers reaffirmed their position that employees should only qualify for unfair dismissal protection after six months of continuous service, rejecting the government’s proposed introduction of day-one rights. The Lords argued that such a move could create uncertainty for employers and hinder job creation.
Lord Vaux of Harrowden, a crossbench peer, described day-one rights as the “most damaging” part of the legislation, saying that businesses needed “clarity and balance” before any major reforms were passed. The Lords’ version of the bill now returns to the House of Commons, with the legislation expected to continue its “ping-pong” journey between the two chambers in the coming weeks.
The Lords also resisted several Labour-backed measures, including proposals on zero-hours contracts, industrial action ballot thresholds, and political levies for union members. These disagreements underline the deep divisions over how far the new law should go in reshaping workplace rights.
Divided Views on Unfair Dismissal
The most contentious issue remains the proposed shift from the current two-year qualifying period for unfair dismissal claims to day-one protection. Supporters say it would give workers greater job security from the outset, while critics warn it risks making employers more cautious about hiring.
The Lords’ compromise of a six-month qualifying period aims to provide a middle ground — offering some early protection for employees while retaining flexibility for businesses. However, trade unions, including the TUC, have rejected the idea, estimating that such a threshold would still leave more than two million workers vulnerable to dismissal without cause.
HR and Legal Experts Urge Preparation
Business leaders and employment lawyers are already advising employers to prepare for possible changes. Kate Palmer, chief operations officer at HR services provider Peninsula, said that while a six-month threshold would preserve some flexibility, “day-one rights remain a manifesto commitment, so it’s unlikely the government will back down easily.”
Employment lawyers are encouraging HR teams to act early. It is recommended to start reviewing employment contracts, offer letters, probation clauses and dismissal policies to ensure compliance with whichever version of the bill is ultimately passed.
As the bill continues its passage through Parliament, one thing is clear: the debate over unfair dismissal rights has become a defining test of how far the UK government is willing to go in reshaping the balance between worker protection and business freedom.
