Agreement reached with key stakeholders on the unfair dismissal elements of the Employment Rights Bill.
The Government convened a series of conversations between trade unions and business representatives. On the basis of the outcome of these discussions, the Government will now move forward on the issue of unfair dismissal protections in the Employment Rights Bill to ensure it can reach Royal Assent and keep to the delivery timeline.
Day one right: sick pay, paternity leave and the Fair Work Agency (FWA)
This will mean delivering day one rights to sick pay and paternity leave in April 2026 as well as launching the Fair Work Agency.
Reforms to benefit millions of working people, including some of the lowest paid workers, would otherwise be significantly delayed if the Bill does not reach Royal Assent in line with the planned delivery timetable.
Businesses also need time to prepare for what are a series of significant changes.
Unfair dismissal
Discussions concluded that reducing the qualifying period for unfair dismissal from 24 months to 6 months (whilst maintaining existing day one protection against discrimination and automatically unfair grounds for dismissal) is a workable package.
This will still benefit millions of working people who will gain new rights and offer business and employers much needed clarity.
To further strengthen these protections, the Government states it has committed to ensure that the unfair dismissal qualifying period can only be varied by primary legislation and that the compensation cap will also be lifted.
Bill amendments and consultation
As a result of the tabling of the amendments, and the commitment by the Government to a robust process to ensure full, fair and transparent consultation and discussion on the detail and application of the secondary legislation, businesses and unions agree that the Bill can progress. This will enable the Government to deliver the necessary consultations and implementation in line with its timetable and manifesto commitments to Make Work Pay.
The Government states it was pleased to facilitate these discussions and to set an example of the benefits of working together, and remains committed to continue engaging with trade unions, business and employers to make working lives better, support businesses and, vitally, deliver economic growth and good job creation.
The Government also states it is particularly aware of the need to support small businesses in the effective adoption of these changes. Constructive dialogue and full consultation with business, employers and unions will continue beyond the passage of the Bill.
PAYadvice.UK 28/11/2025