‘Day-one’ rights abandoned: Lawyers warn six-month rule marks significant change for businesses
The government has caved at the final hurdle after weeks of the House of Lords ping-ponging the Employment Rights Bill over the controversial ‘day one’ rights.
The House of Lords has been fighting back against several key points in the Bill, especially the day-one rights. The highly contested Bill was a significant part of Labour’s manifesto and was expected to lead to a major overhaul of the UK’s employment laws.
Just before the government went on Summer recess, the House of Lords voted in favour of a Conservative-led amendment to bring ‘day-one’ rights provisions up to six months.
However, on Thursday evening, it was reported that the Department for Business and Trade put forward new proposals to scrap the ‘day one rights’ in favour of the six-month clause.
Colin Leckey, partner at Lewis Silkin, noted that it was a “stunning U-turn by the government.”
He explained, “The House of Lords has repeatedly dug its heels in and insisted that this be looked at again to the point where an impasse had been reached, and there has been no clear route for the government to move forward in the short term.”
From two years to six months
Tim Gilbert, partner at Travers Smith, noted that this move “should finally break the deadlock stalling the Employment Rights Bill in Parliament”. Adding it will be a “welcome relief for employers who have long been left in the dark about how the changes would affect them”.
Caspar Glyn KC, Chair of the ELA, added, “My expectation is that after such a considerable move, the Lords should move on other matters.”
On the details, Glyn stated, “Given that we are not dealing with day-one rights but a qualifying period, I do wonder whether the introduction of a six-month qualification period may be sooner than October 2027.”
However, despite the improvement from the automatic ‘day one’ rights, Gilbert highlighted that a 6-month threshold is still a significant reduction from the current two-year requirement to claim unfair dismissal.
“With these enhanced rights, a surge in tribunal claims seems inevitable, as it will mean even more pressure on an already overstretched Tribunal system,” he added.
James Townsend, partner at Payne Hicks Beach, added, “There’s still time for Ministers to rethink and scale back other measures, particularly those that will significantly expand union power.”