The Employment Rights Bill will no longer provide day-one protection against unfair dismissal. Instead, the current two-year qualifying period will be reduced to six months.
The major change to the Bill was made after the House of Lords had insisted on this change, which had caused the Bill to ‘ping-pong’ back and forth between the two Houses of Parliament and most importantly delayed it being passed into law.
Ahead of the Bill being debated once more in the Commons on 8 December 2025, the announcement was made yesterday (27 November 2025) that the Government has agreed to amend the qualifying provision to introduce a six-month qualifying period.
This will mean that there will be no need to create a new statutory probation period where a ‘light touch’ process might be allowed. The full protection will apply from six months as it does now from two years. The current exceptions where protection applies from day one, for example where dismissal was for whistleblowing, will also continue to apply.
This is good news for employers who had been concerned about the uncertainty of the new probation procedures and how they would apply.
However, in the press release there was also a reference to the compensation cap being ‘lifted’. The current maximum compensation that an employee can ordinarily be awarded for unfair dismissal is limited to the lesser of 52 weeks’ pay or £118,223. The latter is revised each year in line with inflation.
The reference to this being lifted suggests that it may either be increased or even removed altogether. If it is removed, it will mean that Employment Tribunals will be able to make unlimited awards reflecting the financial losses of the employee. This is not something that was previously proposed in the Bill. In practice, it is likely to result in unfair dismissal claims being more actively pursued by more employees in senior positions with salaries that exceed the current limits. On the other hand, if the 52-week limit is removed but there is still an overall cap applied of £118,223 or similar, it might mean that awards overall are potentially more generous without opening the doors to huge awards that would remain, primarily to be litigated in the High Court. The outcome will only be clear when we see the amended draft legislation.
The Bill will now once again be debated in the House of Commons and House of Lords and if agreed it will proceed to Royal Assent and become law. However, there may yet be further delays as the Houses have also had disagreements about the provisions concerning the proposed requirement to offer guaranteed hours to zero hours employees. Whether this concession in relation to unfair dismissal protection is sufficient to get the Bill into law in the immediate future remains to be seen.