Labour has ditched its manifesto pledge to offer workers unfair dismissal rights from day one amid concerns it could deter businesses from hiring.
Ministers have agreed to introduce the right after six months of employment instead, replacing the current 24-month qualifying period for unfair dismissal rights.
Recent “constructive conversations” between trade unions and business representatives prompted a U-turn on the Employment Rights Bill, said the government.
The British Retail Consortium (BRC) said the compromise is proof that ”meaningful engagement” between businesses, trade unions and government can lead to “positive outcomes for everyone”.
“We now need similar engagement on other areas of the Bill which are of significant concern. For example, Guaranteed Hours, where current proposals would make it harder for retailers to offer local, flexible and part-time jobs,” said BRC chief executive Helen Dickinson.
Other new day-one rights to sick pay and paternity leave will still go ahead in April 2026, confirmed the government.
The government said it is moving forward with the unfair dismissal protections in the Employment Rights Bill to secure Royal Assent and maintain the planned delivery timeline.
The Association of Convenience Stores (ACS) welcomed the government’s decision to change its qualifying period for unfair dismissal from day one to six months.
“This compromise reflects the concerns of retailers and provides a clearer, fairer framework for businesses and workers,” said James Lowman, chief executive of the ACS.
“Local shops play a vital role in creating secure, flexible jobs that support communities and the wider economy. We are committed to working constructively with government as further consultation happens.”
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