Minister defends pragmatic U-turn on workers rights

The education secretary has defended Labour’s U-turn over offering all workers the right to claim unfair dismissal from their first day in a job.

Instead, ministers now plan to reduce the qualifying period from the current two years to six months, in line with a deal agreed by some unions and industry groups.

Bridget Phillipson told the BBC the climbdown was a “pragmatic” move to ensure “wider benefits” in Labour’s employment rights bill could be delivered on time.

The decision has been welcomed by business organisations, but has faced criticism from some MPs on the left of the Labour Party.

Currently, after two continuous years in a job workers gain additional legal protections against being sacked.

Employers must identify a fair reason for dismissal – such as conduct or capability – and show that they acted reasonably and followed a fair process.

Under Labour’s original plan, this qualifying period would have been abolished completely, with a new legal probation period, likely to have been nine months, introduced as a safeguard for companies.

But business groups argued the plan could prove unworkable, and voiced concerns that day-one unfair dismissal rights would discourage firms from hiring.

In a surprise announcement on Thursday, the government confirmed it will now bring in unfair dismissal protection after six months, and ditch the new legal probation period.

Ministers are continuing to insist the move does not breach Labour’s general election manifesto – even though the document clearly commits the party to creating “basic rights from day one to parental leave, sick pay, and protection from unfair dismissal”.

When the Commons debated the employment bill in September, Business Secretary Peter Kyle told MPs: “We were elected on a manifesto to provide protection from unfair dismissal from day one of employment”.

But on Thursday, he said the move was not a breach, since the party had also committed to “bring people together” over the issue.

The minister, who is responsible for Labour’s employment legislation, also argued it was “not my job to stand in the way” of an agreed approach brokered between some unions and business groups.

Ministers are also arguing the U-turn would unblock the passage of its wider employment rights bill through Parliament.

But former Employment Minister Justin Madders said he was “a little concerned” the government u-turn on unfair dismissal rights from day one of employment could open the door to further watering down of the bill.

The Labour MP, who lost his ministerial job in the September reshuffle, said: “I do appreciate there has to be some compromise but equally I’m not convinced we’ve done everything we can to stay true to our manifesto commitments and deliver the workers rights agenda in full.”

Conservative and Liberal Democrat peers have twice teamed up with crossbenchers in the House of Lords to insist on a six-month period instead, delaying its progress.

The Conservatives have said the legislation is “still not fit for purpose”, whilst the Lib Dems said the law had been “rushed and mired in problems from the get-go”.

Speaking to BBC Radio 4’s Today programme, Phillipson said the deadlock over unfair dismissal could have “jeopardised” the bill, which also contains new worker benefits, such as immediate rights to sick pay and paternity leave.

The move to lower the unfair dismissal qualifying period from two years to six months was still a “big step forward,” she added.

“Sometimes in life, you have to be pragmatic to secure wider benefits”.

The U-turn was universally welcomed by groups representing British industry, who had warned that fears over day-one dismissal rights had led to a stall in hiring new workers.

Martin McTague, national chair of the Federation of Small Businesses, said: “I can’t emphasise too much that this part of the bill was the most important thing to put right.”

So far, the reaction to the manifesto breach has been reserved to MPs on the left Labour Party.

However, the Labour leadership will be less comfortable if former deputy PM Angela Rayner – the architect of the initial proposals – expresses criticism. She has not responded to requests for comment.

The U-turn has received an angry reaction from the Unite union, a major Labour donor through the affiliation fees its members pay to the party.

The union’s boss Sharon Graham told the BBC it was “absolutely a breach” of the party’s election manifesto, adding she feared “further watering down” of the employment bill in the future.

The business department confirmed on Thursday that it still plans to bring in day-one sick pay and paternity leave rights from April 2026.

However, it is yet to confirm a start date for the new 6-month period, which it is understood will not be specified in the employment bill itself either.

It had previously committed to implementing the right from day one from 2027, under a “roadmap” unveiled over the summer.

The government does not need to pass the employment rights bill to change the qualifying period – it already has powers to do this under existing legislation, which the coalition government used in 2012 to up the period to the current two years.

But writing the changes into a full Act of Parliament was meant to prevent the new rights being easily unpicked by a future government.

On Thursday, the business department said it was still committed to doing this, as a means to “further strengthen” the new protections.