The government is set to abandon its flagship policy granting workers the right to claim unfair dismissal from their first day on the job, replacing it with a six-month threshold. The change follows negotiations between six major business groups and trade union leaders, brokered by Business Secretary Peter Kyle.
Kyle told the CBI conference this week that he would listen to business concerns about the impact on hiring. A trade union source said the government had 'capitulated', warning that further concessions may follow. The Trades Union Congress (TUC) accepted the compromise, with General Secretary Paul Nowak stating that the priority is to get other rights, such as day-one sick pay, onto the statute book.
The reversal breaches Labour's manifesto promise of 'day one' protection against unfair dismissal. MPs are expected to be uneasy, and the change adds pressure on ministers already facing criticism over Rachel Reeves's budget breaking pre-election tax pledges. A source close to former deputy prime minister Angela Rayner, who vigorously defended day-one protections, said she would respond after consulting other MPs.
Business leaders from six lobby groups welcomed the deal, calling it 'crucial for business confidence to hire and to support employment'. The qualifying period for unfair dismissal will be reduced from two years to six months, and the previously proposed nine-month probation period will be scrapped. The agreement aims to speed the bill through the House of Lords, avoiding delays beyond Christmas.
However, the deal has exposed divisions among unions. Unite General Secretary Sharon Graham called the bill a 'shell of its former self', objecting to the concessions. The TUC had previously warned that a six-month period would leave over 2 million workers at risk of unfair sacking. The government insists the changes will not be a 'zero-sum' outcome, with Kyle vowing that businesses will not 'lose' under the new law.
