Soundbite: Government abandons plan to introduce day one unfair dismissal rights

It was announced on 27 November 2025 that the Government has abandoned its plans to grant workers protection against unfair dismissal from day one of employment. Instead, it has been confirmed that the qualifying period of employment for unfair dismissal claims will be reduced from the current two years to six months.

This follows concerns that day-one unfair dismissal rights could exacerbate the existing tribunal backlog and discourage firms from making new hires.

The Government had planned to introduce a new legal probation period alongside the day-one right, which was likely to have been nine months, but plans for this have also now been scrapped.

However, day-one rights to sick pay and paternity leave remain scheduled for April 2026.

It was also announced that the compensation cap for unfair dismissal will be lifted. This is yet to be clarified, but it is possible that the current 52-week limit may be removed but that the overall maximum award will remain at £118,223.

While a 6-month qualifying period rather than a day-one right to unfair dismissal will give businesses some relief, it is still a significant reduction from the current 2-year qualifying period. It is therefore important that employers focus on developing strong performance assessment processes for early employment stages and ensure managers are trained to use these effectively in preparation for the upcoming legal changes.

The removal of the 52-week cap on compensation could also significantly increase potential payouts for unfair dismissal claims, making dismissals more costly and raising overall litigation risk for employers. Employers should therefore ensure they have the correct policies and procedures in place to mitigate their exposure to this risk.

If you need advice on how to prepare your business for these upcoming changes, please contact a member of the team.