House of Lords Rejects Day-One Unfair Dismissal Rights Again: What Employers Need to Know

On 28 October 2025, the House of Lords voted once more to reject the government’s plan to introduce day-one rights to protection from unfair dismissal. Although the policy is a central government commitment and supported by the House of Commons, the Lords continue to argue for a six-month qualifying period instead.

This disagreement means the Bill will now return to the House of Commons as part of the parliamentary process known as “ping pong”. Until the two Houses reach agreement, the Bill cannot progress to completion.

This blog explains what has happened, the key differences in approach, and the implications for employers. It also highlights the wider context of the Lords’ amendments, including guaranteed hours offers, trade union matters, and an unexpected provision relating to heritage railways.

Next Steps in Parliament

The Bill will return to the House of Commons for further debate on the Lords’ latest amendments. There is currently no confirmed timetable for this stage, which means the Bill’s progress will be delayed.

The government is unlikely to abandon its manifesto commitment to deliver day-one rights for unfair dismissal. However, it will also be aware of the risk of prolonged deadlock if both Houses remain firmly opposed on this issue.

Unfair Dismissal Rights: The Central Disagreement

Government and House of Commons Position

The government proposes that protection from unfair dismissal should apply from the first day of employment. This would be supported by a statutory probationary period, potentially lasting up to nine months, during which a lighter standard of fairness would apply. The exact rules for this lighter standard are still subject to consultation.

House of Lords Position

The Lords favour a six-month qualifying period rather than day-one rights. Their objections focus on concerns about economic impact, potential effects on hiring confidence, added pressure on the tribunal system, and the lack of detailed clarity about how a statutory probationary regime would operate.

International Context

Examples cited during debate include Germany and Sweden, both of which have frameworks involving six-month qualifying or probationary periods. In Germany, employers can dismiss within the first six months provided the termination is not abusive. In Sweden, where a probationary period of up to six months has been agreed, employers do not need to show “just cause” during this period, although discrimination laws still apply.

Current UK Practice

Most UK employers operate probationary periods of three to six months. These periods are used to assess performance, suitability, and cultural fit, and to manage any early concerns or role-related misunderstandings. Complications can arise when employees take sickness or family-related leave during probation, but employers currently retain flexibility provided they avoid discrimination or other rights that apply from day one.

Challenges and Benefits for Employers

Potential Challenges of Day-One Rights

• Reduced flexibility during the earliest stages of employment.

• Increased need for formalised performance management from the outset.

• Greater legal risk where employees raise concerns or performance issues emerge quickly.

• Less room for informal course correction during induction.

• More pressure on onboarding, training quality, and documentation.

Potential Benefits of Day-One Rights

• Strengthened trust and engagement from new starters.

• Greater clarity and structure around probation and early performance expectations.

• More consistent treatment of all employees, reducing grey areas caused by varied probation lengths.

• Encouragement to invest in better recruitment, induction, and early supervision.

• A potential reduction in disputes arising from uncertainty about fairness standards during early employment.

Challenges and Benefits of a Six-Month Qualifying Period

A six-month period would:

Challenges:

• Still reduce flexibility compared to the current two-year threshold.

• Require clearer performance management processes earlier in employment.

• Increase risk during early disputes or sickness-related issues.

Benefits:

• Align more closely with existing market practice.

• Avoid the abrupt shift to full day-one rights.

• Provide employers with a clearer, more manageable transition point.

• Reduce the risk of immediate litigation while shortening the previous two-year wait.

Guaranteed Hours Offers (GHOs)

The Bill will introduce a duty on employers to offer guaranteed hours to zero-hours and low-hours workers once certain conditions are triggered. The House of Lords now propose:

• A requirement to issue a written notice informing workers of their right to receive a GHO.

• A right for workers to decline both the offer and any future offers or notices.

• A requirement for the government to consider the unique needs of seasonal work when drafting regulations.

This could affect sectors that rely on fluctuating staffing patterns, including care, hospitality, retail, and events.

Trade Union Matters

The Lords continue to oppose government plans to change trade union rules. They wish to maintain:

• The current opt-in system for contributions to a union’s political fund.

• The existing 50 per cent turnout threshold for industrial action ballots.

These issues are likely to be revisited during the next Commons debate.

Heritage Railways Amendment

One of the more unexpected amendments is a requirement for certain government bodies to produce guidance relating to children working for heritage railways or tramways.

The Importance of Heritage Railways

Heritage railways play a significant cultural and economic role in the UK. They:

• Preserve vital elements of Britain’s engineering and industrial history.

• Support tourism and contribute to rural economies.

• Provide educational and skills-based opportunities, particularly in engineering and technical crafts.

• Offer structured volunteering pathways for young people.

• Help sustain community engagement in areas where traditional industries have faded.

Recognising their unique needs helps ensure historic railway operations remain safe, sustainable, and accessible for future generations.

What Employers Should Do Now

At this stage:

• No changes have come into force.

• The current two-year qualifying period for unfair dismissal remains in place.

• Employers should monitor parliamentary developments closely.

• It may be sensible to review probation processes, induction frameworks, and documentation in preparation for significant reforms once the Bill is finalised.

Craven will provide updates as the Bill progresses.