House of Lords votes against day-one unfair dismissal rights

The House of Lords has voted to remove a key provision of the Employment Rights Bill that would have granted employees protection against unfair dismissal from their first day at work.

Instead, peers supported an amendment introducing a six-month qualifying period before employees become eligible to bring an unfair dismissal claim.

The amendment, proposed by Conservative peer Lord Sharpe of Epsom, was approved by 304 votes to 160 during the Report stage of the Bill.

The Government’s original version of the Bill sought to reduce the current two-year qualifying period to day one, while also introducing a “light touch” procedure for dismissals during probation.

Claire Cole, senior employment solicitor at law firm Harper James, highlighted the potential implications of the change.

She said: “The House of Lords has proposed an amendment to the Bill which would reduce the 2-year qualifying period to six months.

“The Report stage is a chance for members of the House of Lords to closely scrutinise elements of the Bill and propose changes. However, once the Bill returns to the House of Commons, where the government holds a majority, the amendment may be rejected.”

She added: “If the amendment is rejected, the Bill’s original proposal for reducing unfair dismissal to a day-one right will stand. Businesses are concerned about increased tribunal risk, the impact on hiring practices, and lack of clarity around what the ‘light touch’ procedure will look like for dismissals during or at the end of probation.

“A much shorter qualifying period brings greater legal exposure and means employers will need to tighten recruitment practices and performance management procedures during probation.

“SMEs, in particular, will feel the impact. Many rely on lean HR teams or line managers to manage onboarding and exits. A misstep, especially during probation, could now be far more costly.”

Cole concluded: “Once the Bill becomes law, clients will need to audit their employment contracts, clearly define probationary terms, and ensure managers are trained on fair processes from day one.

“This is a fundamental change to unfair dismissal rights and it’s likely to shift how employers approach risk, recruitment, and retention.”

The Employment Rights Bill will return to the House of Commons, where MPs may choose to reinstate the original day-one protection.