The Labour government has performed a significant U-turn on its flagship workers' rights legislation, abandoning plans to provide day-one protection against unfair dismissal.
Compromise Reached After Parliamentary Stand-off
Ministers have confirmed that workers will now need to complete six months of service before they can claim unfair dismissal against their employer. This represents a major departure from Labour's manifesto commitment to provide these rights from the first day of employment.
The change comes as the Government seeks to break the parliamentary deadlock that has threatened the passage of the Employment Rights Bill through Parliament. The legislation had become caught in a stand-off between peers and MPs over the original plan for day-one protection.
Business Secretary Peter Kyle defended the compromise, telling broadcasters on Thursday that unions and employers had found common ground. "They've gone through the difficult process of working together to find a compromise... it's my job to accept it," he stated.
Mixed Reactions from Unions and Business Groups
The climbdown has sparked contrasting responses from different stakeholders. Unite boss Sharon Graham expressed strong disappointment, saying the Bill had become "a shell of its former self" and warning that constant row-backs would damage workers' confidence.
However, TUC general secretary Paul Nowak struck a more conciliatory tone, emphasising that the "absolute priority" was to get the legislation onto the statute books. He urged peers to respect Labour's manifesto mandate and ensure the Bill secures royal assent quickly.
Business groups welcomed the change, with multiple organisations including the CBI, British Chambers of Commerce and Federation of Small Businesses issuing a joint statement. They described the six-month qualifying period as "crucial for businesses' confidence to hire" while still protecting workers.
Manifesto Breach and Backbench Discontent
The policy reversal represents a clear breach of Labour's election manifesto, which explicitly promised to introduce "basic rights from day one to parental leave, sick pay, and protection from unfair dismissal."
Labour backbenchers were quick to voice their disapproval. MP Andy McDonald branded the move a "complete betrayal" and vowed to campaign for its reversal. Another Labour MP told PA that the climbdown showed Sir Keir Starmer and Rachel Reeves were "weak" and had caved to external pressure.
Despite the criticism, Culture Secretary Lisa Nandy defended the decision, calling it "a reasonable and a fair compromise" given the opposition the Bill faced in the House of Lords.
The Department for Business and Trade insisted the updated package would still "benefit millions of working people" while providing employers with "much-needed clarity." The government has committed to ensuring that any future changes to the unfair dismissal qualifying period would require primary legislation.
