The government has U-turned on its manifesto promise to introduce day one protections from unfair dismissal.
Sir Keir Starmer’s party campaigned last year on a pledge to introduce “basic rights” including parental leave, sick pay, and protection from unfair dismissal as part of the Employment Rights Bill.
But the government has now backtracked on the policy after concerns raised in the Lords about the impact it could have on small businesses saw it struggle to progress through parliament.
Ministers previously rejected the Lords’ suggestion to change the qualifying period to six months, with business minister Kate Dearden saying it was “committed to delivering unfair dismissal protections from day one”.
But in an update on Thursday, the government said the protections will now be in place from six months, adding it had made a “workable package” that would be more likely to get approved by MPs. currently, the qualifying period is 24 months.
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”.
“To further strengthen these protections, the government has committed to ensure that the unfair dismissal qualifying period can only be varied by primary legislation and that the compensation cap will be lifted,” the DBT said.
The change is also backed by union chiefs, who said the “absolute priority” is to get benefits like day one sick pay onto the statute book. One source told The Independent unions affiliated to the Labour Party had been in talks with the government and employers’ representatives over the last few days.
They noted that there had been “ping pong” between the Lords and Commons on the issue of employment rights and had come to “a fair compromise”.
Only unfair dismissal was discussed within the rights, they added, but noted that a nine month probation qualifying period had now been removed which “could have hung over employees”. The talks also saw the removal of the compensation cap for unfair dismissal imposed by the previous Tory government.
The source said: “This has broken the deadlock and crucially it means that 8 million people will have day 1 sick leave rights from April next year.”
TUC 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 benefitting from them from next April.
“Following the government’s announcement, it is now vital that Peers respect Labour’s manifesto mandate and that this Bill secures Royal Assent as quickly as possible.”
