The House of Lords has voted to remove a key part of the Employment Rights Bill that would have given employees protection against unfair dismissal from their very first day at work.

Instead, they supported an amendment introducing a six-month qualifying period before employees gain unfair dismissal rights. This amendment, put forward by Conservative peer Lord Sharpe of Epsom, was approved by 304 votes to 160 during the debate.

Senior Employment Solicitor at law firm Harper James, Claire Cole, highlights what this means, especially for SMEs:

“The House of Lords continues its Report stage scrutiny of the Employment Right Bill. The Bill originally proposed that the current 2-year qualifying period for unfair dismissal would be abolished and replaced by a new day-one right. The government also proposed a “light touch” procedure for dismissal during the initial probationary period.  The House of Lords has proposed an amendment to the Bill which would reduce the 2-year qualifying period to 6 months.

 “The Report stage is a chance for members of the House of Lords to closely scrutinise elements of the Bill and propose changes. However, once the Bill returns to the House of Commons, where the government hold a majority, the amendment may be rejected.

 “If the amendment is rejected, the Bill’s original proposal for reducing unfair dismissal as a day one right will stand.  Businesses are concerned about increased tribunal risk, impact on hiring practices, and lack of clarity around what the “light touch” procedure will look like for dismissals which take place during or at the end of the probationary period.  A much shorter qualifying period brings greater legal exposure and means employers will need to tighten up recruitment practices and performance management/dismissal procedures during probation.

 “SMEs, in particular, will feel the impact. Many rely on lean HR teams or line managers to manage onboarding and exits. A misstep, especially during probation, could now be far more costly. Once the Bill becomes law, clients will need to have audited their employment contracts, clearly defined probationary terms, and ensure that managers are trained on fair processes from day one.

 “This is a fundamental change to unfair dismissal rights and it’s likely to shift how employers approach risk, recruitment, and retention. We will be working with our clients who want to stay ahead and prepare for the Bill becoming law.”