The Employment Rights Bill (ERB) has been subject to parliamentary “ping pong”, with the House of Lords repeatedly resisting the introduction of day-one unfair dismissal rights. The House of Lords twice voted in favour of a six-month qualifying period instead, slowing the legislation’s passage through Parliament, and ultimately its enactment.
To breakthrough this back and forth, the government has agreed to a 6-month qualifying period; a U-turn on its manifesto policy for day-one unfair dismissal rights.
While a win for employers, news sites are reporting that Angela Rayner is intending to amend the ERB so that the reduction to the qualifying period will come into force from 2026 (and not 2027 as initially planned).
Additionally, the government has also announced that the “compensation cap for unfair dismissal will be lifted”. This phrase, as used in the Government’s press material, currently raises more questions than answers. However, commentary from those involved in discussions indicates an intention to remove the 52-week salary limit, while retaining the overall upper cap on compensation.
The revised ERB proposals will return to the House of Commons on 8 December 2025, where we can expect further debate and amendments. Until the updated draft legislation is published, the amendments regarding compensation limits remain uncertain.
If you have any questions about upcoming changes, reach out to the Employment Law Team or your usual Brecher contact.
This update is for general purpose and guidance only and does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered. No part of this update may be used, reproduced, stored or transmitted in any form, or by any means without the prior permission of Brecher LLP.
