London, November 30, 2025
The UK Labour government has reversed its commitment to grant day-one protection from unfair dismissal, confirming that the Employment Rights Bill, set to receive Royal Assent by the end of 2025, will not include this significant reform. The decision comes amid concerns from employers about hiring challenges and economic impacts.
Labour Government’s Policy Reversal
Originally pledged in its manifesto, the Labour government planned to eliminate the two-year qualifying period required for employees to claim unfair dismissal. The policy aimed to give all workers the right to contest unfair dismissal from their first day on the job. However, the government has now abandoned this promise, opting not to incorporate day-one protection into the new Employment Rights Bill.
This U-turn represents a notable shift in Labour’s approach to employment law reform, aligning with calls from business groups and employers worried about the potential adverse effects on hiring practices, especially for small and medium-sized enterprises.
Rationale Behind the Shift
The government cited feedback from employers voicing concerns that immediate unfair dismissal protection could complicate recruitment efforts and disincentivize job creation. Balancing workers’ rights with business viability has led Labour to adopt a more measured strategy.
Instead of day-one protection, the government is prioritizing other reforms, including enhanced safeguards for agency and gig economy workers and expanded rights to flexible working arrangements. Additional measures aim to reinforce protections for whistleblowers and pregnant women, alongside introducing mandatory gender pay gap reporting and menopause action plans beginning in 2027.
Ongoing and Planned Employment Reforms
Despite dropping day-one dismissal protection, the Employment Rights Bill will proceed with several impactful changes expected to take effect in 2026 and 2027. These include stronger collective consultation rules to empower workers, improved flexible working options to support work-life balance, and new legal protections for vulnerable employees.
These reforms demonstrate Labour’s commitment to addressing contemporary workforce challenges while accommodating economic considerations expressed by the business sector.
Stakeholder Reactions
Trade unions have voiced sharp disappointment, characterising the decision as a setback for workers’ rights and a breach of Labour’s electoral promises. They argue that removing day-one protection undermines job security and leaves new employees vulnerable to unfair treatment.
Conversely, business organizations have welcomed the move, contending that the maintenance of the two-year qualifying period preserves crucial flexibility and reduces legal risks for employers, which could encourage hiring and economic growth.
Legal experts acknowledge the significance of the U-turn but suggest that the issue may resurface in subsequent legislation as the government continues to refine employment protections. For now, the longstanding two-year qualifying period remains the law.
Labour’s balancing act highlights the complex interplay between safeguarding employee rights and fostering an environment conducive to business growth and job creation.
As the Employment Rights Bill advances without day-one unfair dismissal protection, attention will turn to the implementation of other reforms designed to modernize labor rights and respond to evolving workplace dynamics.