EMPLOYMENT RIGHTS BILL: DaY one Rights, U-TURNS, redundancy CHANGE, and Left TURNS
The Employment Rights Bill showed all the signs of being stuck in parliamentary ping-pong – and then, out of nowhere, we saw a major U-turn from the Labour government on day-one rights. In truth, this shift will give us a much clearer sense of how things are likely to land. However, we are still some way off having an agreed Code of Practice, so the specifics remain uncertain for the time being. That said, there is a growing sense that we’ll soon understand where things stand.
One confirmed development is that, for unfair dismissal cases, it appears the government has agreed to remove the one-year cap on unfair dismissal compensation. The details around this are still to be defined, but it signals change. In settlement discussions, the implied employee threat that “you can only get a year’s salary at tribunal” may disappear. The bigger question, though, is what happens next.
The original proposal for a nine-month probation period was intended to give employees a light-touch process, but the working assumption now is that most employers will keep a six-month qualifying period, similar to what we see today. Sensibly, employers may start to standardise six-month probation periods to protect themselves. During this time, employees would receive one week’s notice. We may also see some hesitation from individuals considering job moves, potentially creating stagnation in the market.
The only exception to the six-month qualifying period relates to those with prior criminal convictions. Essentially, someone dismissed because of a previous conviction may be able to bring a claim from day one.
Day-one unfair dismissal rights were scheduled to come into effect in 2027, and we assume that timeline will remain. The broader motivation behind the current changes seems to be to ensure the rest of the Employment Rights Bill isn’t held up, allowing other reforms to progress. As such, we still expect elements to take effect from April 2028 through to 2027, with the roadmap largely intact.
We also expect the updated ACAS Code of Practice documents in early 2026, which should give us a much clearer view of the standards and how these changes will play out in practice.
In terms of what you need to do now: nothing. There is nothing meaningful employers can prepare until we have sight of those Codes of Practice. Once they’re published, we’ll have a stronger sense of the actions required.
If you have any questions about any of this, or about any of your people challenges more broadly, please don’t hesitate to get in touch.
