The government has dropped its flagship plan to give workers the right to claim unfair dismissal from day one, abandoning a key Labour manifesto pledge after an intense backlash from employers and a parliamentary standoff in the House of Lords.
Instead, the qualifying period for unfair dismissal claims will be set at six months, following two days of negotiations between government ministers, trade unions and business groups. The compromise is designed to ensure the Employment Rights Bill can pass before April 2026, when Labour wants the new rights to come into force.
Lisa Nandy, the culture secretary, said the government had reached an “impasse” with the Lords, which refused to support day-one dismissal rights.
“Unfair dismissal was the sticking point,” she told Times Radio. “We brought together trade unions and business leaders and they’ve negotiated a compromise. These rights will now come into force in six months. Treating this as a zero-sum game is how we got into this in the first place.”
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