Key Contact: Chris Aldridge
As part of its manifesto commitment, the Labour Government planned to offer all workers the right to claim unfair dismissal from their first day of employment.
However, on 27 November 2025, they announced that people will need to have at least 6 months of continuous service before they can claim unfair dismissal against their employer. Currently, employees need to have been in a role for at least 24 months before they are able to claim unfair dismissal.
The latest news forms a key part of the Employment Rights Bill, which had aimed to give workers the right to protection from unfair dismissal from their first day of employment. Following conversations between trade unions and business representatives, the Government has decided to proceed with the issue of unfair dismissal protections to ensure it can reach royal assent and keep to their published delivery timeline, avoiding the legislation being delayed in the House of Lords.
The government have also announced that it will lift the unfair dismissal compensation cap (currently the lower of 12 months’ gross salary or £118,223). It is unclear whether this means a removal of the cap entirely or an increase to either element.
What does this mean for employers?
The previously suggested day-one rights were a concern for many employers, due to the substantial risk of lengthy and expensive tribunal cases. In turn, it is likely that this would have led to a cautious approach to recruitment practices and even deter hiring. Now that the Government have announced a new 6-month qualifying period, this may address some concerns in relation to the cost and risk of hiring.
Employers will have the opportunity to assess a new worker’s performance and correct any initial hiring mistakes, without the risk of immediate tribunal cases. It is good practice to document any performance issues clearly, particularly during the initial 6-month period, to provide a robust basis for any dismissal decisions. Additionally, the six-month period aligns closely with current industry practices, such as probationary periods of 3-6 months.
Key considerations for employers:
- Documentation is key: you should carefully document performance and capability, by maintaining a clear paper trail of any meetings, emails, or warnings.
- Address issues promptly: address any performance-related issues quickly, whilst maintaining consistent practice amongst all employees.
- Risk of other claims: note that the protection for unfair dismissal does not extend to claims for ‘automatically unfair’ reasons or discrimination, which can still be brought from an employee’s first day of employment.
What does this mean for employees?
Employees must work for 6 months before they can claim unfair dismissal, which is a significant reduction from the current 24-month requirement, but a key change from the original day-one proposal by the Government.
Key considerations for employees:
- The new law will not affect the ability to claim unfair dismissal from day one for reasons that are automatically unfair, such as discrimination or dismissal related to health and safety.
- Earlier access to unfair dismissal protections compared to the previous 24-month protection.
Please note that this update has not become law yet and may be subject to change. We will continue to monitor this development.
Contact the Employment Team for more information
