On 27 November 2025 the government confirmed it will replace its day‑one unfair dismissal pledge with a six‑month qualifying period, a compromise aimed at ending delays in the House of Lords and keeping the Employment Rights Bill on schedule. Ministers said day‑one sick pay and paternity leave remain due from April 2026 alongside the launch of a Fair Work Agency.

The Department for Business and Trade added two points employers will care about. First, any future change to the qualifying period will require primary legislation. Second, the cap on compensation for unfair dismissal will be lifted-meaning higher potential awards where claims succeed.

Peers had already voted for a six‑month threshold, sending the Bill back to the Commons and prolonging ‘ping‑pong’. Today’s shift follows minister‑brokered talks with unions and major business groups to secure passage and stick to the published timetable.

Unions struck a pragmatic note. The TUC urged peers to finish the job so day‑one sick pay lands next April; its earlier analysis suggested more than two million workers would be left without protection under a six‑month rule.

Conservatives called it a humiliating U‑turn and said the legislation remains flawed. Shadow business secretary Andrew Griffith led that criticism, arguing the package still risks burdening hiring.

What actually changes for employers? Today, most employees need two years’ service to claim ordinary unfair dismissal. If the Bill becomes law, that threshold falls to six months. Day‑one protections for discrimination and automatically unfair reasons-such as health and safety or lawful trade‑union activity-continue to apply.

Plans for a statutory probation framework have been dropped, so businesses will continue to rely on contract clauses and process. Early‑tenure decisions will still be judged on reasonableness: clear objectives from week one, documented feedback, and a fair chance to respond are the basics tribunals look for.

Costs will rise on sickness absence from April 2026. Statutory sick pay becomes a day‑one entitlement for all workers as the lower‑earnings limit and the three waiting days fall away, according to legal trackers of the government’s roadmap. Build this into 2026/27 budgets and review absence triggers now.

Liability shifts earlier too. With the compensation cap set to be lifted, exits after six months could carry larger awards, lifting the value at risk in negotiations. Finance teams should revisit employment‑practices liability cover, settlement parameters and governance on probation extensions or exits.

For a 50‑person services firm running six‑month probation, the practical playbook is simple: schedule a formal review by month five, log any concerns contemporaneously, and train first‑line managers on fair‑process basics. The familiar fair reasons-conduct, capability, redundancy, illegality or some other substantial reason-remain the test, not gut feel.