Employment Rights Bill watered down – what’s changed?

Last week, the government confirmed it will U-turn on its proposed changes to unfair dismissals, a major commitment under its Employment Rights Bill.

The Bill’s original plan was to give employees protection from unfair dismissal from their very first day in the job. But that protection will now kick in at six months, rather than day one.

It’s a major shift, since the Bill represents the biggest overhaul of employment law in years, with new legislation that will affect hiring, firing, sick pay, and parental leave.

Why the Bill is being revised — and what’s changed

While headline reforms, like day-one sick pay and parental leave, remain on track to be delivered, the government has backtracked on one of its most controversial proposals. Instead of “day-one” unfair dismissal rights, employees will first need to work a “qualifying period”.

Employees will need to work for six months continuously to benefit from protection against unfair dismissal, instead of from the first day, as initially proposed.

As it stands now, employees have to work for 24 months continuously to receive protection against unfair dismissal, except in cases of discrimination or ‘automatically unfair’ grounds for dismissal.

The compromise of six months is the result of weeks of negotiation involving ministers, business groups and trade unions.

On one hand, employers warned that day-one rights would make it harder to manage probation periods, while unions argued for stronger job security. The six-month model emerged as a middle ground.

Several other reforms from the original Bill will go ahead unchanged. From April 2026, employers will need to offer their staff:

• Day-one access to statutory sick pay (with no lower-earnings threshold)
• Day-one rights to parental and paternity leave

The Fair Work Agency is a new enforcement body that will serve to deal with breaches of the new Bill and offer combined oversight over regulators that currently work separately

SME bosses will therefore have more responsibility for compliance, but potentially simpler management of new hires in the first six months. Probation periods, performance reviews, and early dismissals will remain workable, though a tad more regulated than before.

What employers and SMEs need to do now

Employers should still start reviewing their HR processes sooner rather than later. The Bill is expected to receive Royal Assent imminently, meaning several elements will take effect quickly.

You’ll need to review your contracts and probation processes to reflect the upcoming six-month qualifying period. And, don’t forget to prepare for the upcoming changes to payroll and benefits.

As of April 2026, employers will owe staff statutory sick pay from day one of illness, with no lower threshold on earnings. Employees will also be allowed to go on parental and paternity leave from day one, which may affect workforce planning, temporary cover, and budgeting.

Small businesses that rely on flexible, seasonal or zero-hours staff should be extra careful. The Bill’s insistence on more predictable working patterns and limits on exploitative scheduling might mean that SMEs need to change how they hire short-term help or offer variable shifts.

That said, as the Bill moves through its final parliamentary stages, there’s potential for further “ping-pong” between the Commons and Lords, which could lead to further changes.

With this in mind, employers should stay tuned for guidance from legal and HR experts on how Acas and the incoming Fair Work Agency will affect hiring and people management.