Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 28th October 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

Motion E1 is the most important amendment we will be debating today. The introduction of day one unfair dismissal rights is the most damaging element in this Bill, in my opinion. While there are problems with much of the Bill, there will, I believe, be a lot of unintended consequences.

For most of the proposed changes to employment rights, the Government are trying to solve genuine problems. Zero-hours contracts can be abused, and the abuse of fire and rehire is well known, to give a couple of examples. But despite my asking many times, no Minister has yet provided any evidence that the current qualifying period is being abused or causing actual harm to employees, and the Minister has added nothing to that today. The impact assessment that accompanies the Bill likewise provides no evidence of cost or harm. We have already heard from the Resolution Foundation that it agrees, saying:

“Making dismissals as hard as in the ERB might also be for little obvious gain to workers”.


Uniquely among the employment rights changes in the Bill, there is little or no evidence that there is really a problem to solve or harm to be prevented here, but very real harms will arise as a result of this policy. The ability to claim unfair dismissal from day one will make it more difficult for employers to take a risk on new employees. The Government’s own impact assessment makes this clear, and it points out that the greatest impact will be on more risky hires, such as young people trying to get that first all-important break, people trying to get off benefits, ex-offenders and so on—all people the Government keep telling us they are trying to help. To repeat, do not take my word for that: the Government’s own impact assessment confirms this.

We have just heard about the business organisations. All that I have seen also points to these unintended consequences, but even if you think, “They would say that, wouldn’t they?”, listen to the Resolution Foundation, not an organisation that has ever been accused of being in hoc to employer organisations. It says, as we have heard:

“The Government’s plan … of getting rid of qualifying periods entirely by making this a ‘day one’ right—has the potential to inhibit hiring”.


It goes on to say, importantly:

“One group of particular concern at the moment are younger adults. The number of young people (aged 16 to 24) not working or studying has risen post-pandemic, and is at its highest level in a decade. And young people’s employment prospects are more sensitive to hiring conditions than older workers”.


I think we can all agree that the current two-year qualifying period is unnecessarily long. That is why the amendments passed on Report reduced it to six months, which should be long enough for most employers to decide whether the hire is working or not. That would bring us into line with countries such as Denmark, Germany, Norway and Sweden, none of which are well known for employment rights abuse. That seemed a sensible compromise, protecting around 6 million more people from unfair dismissal, while reducing the unintended impact on higher-risk hires such as young people. To quote the Resolution Foundation again— I think it is going to get quoted a lot today:

“Reducing rather than scrapping qualifying periods would still respect the spirit of the Government’s manifesto, and it would deliver a security upgrade to millions of workers …but it would do so in a way that doesn’t needlessly put employers off hiring”.


The Government simply rejected this compromise, while providing no reason and no evidence whatever of a problem.

What is needed for a probation period to allow an employer to give a potential new hire the benefit of the doubt is for there to be no risk of being taken to an employment tribunal during that period, other than for the standard existing statutory reasons, such as discrimination. Before anyone suggests, as they have in the past, that there will not be an increase in tribunal claims, I remind noble Lords that the Government’s own impact assessment states that a benefit of the policy is that there will be an increase in tribunal awards. That is actually in the impact assessment.

We have heard that the Government intend to consult on the matter and to create a nine-month, light-touch probation period. That sounds good, but the Bill pre-judges that consultation. New Section 98ZZA(3) sets out very clearly that certain fair reasons must be given to dismiss someone during a probation period, and unfortunately, those reasons are materially the same as those that must be given after the qualifying period. That means that, as the Bill is drafted, the risk of being taken to an employment tribunal will always remain. It will not in fact be possible to create a genuinely light-touch probation period after the Bill is passed, whatever the results of the consultation. So the Government’s suggestion that it will be okay because of the future consultation and regulations just does not stand up to scrutiny.

We have often heard that this is a manifesto commitment, but the Government never mention the other explicit manifesto commitment: that they would

“consult fully with businesses, workers, and civil society … before legislation is passed”.

It is in the same paragraph. It seems to be okay to breach that manifesto commitment.

As I say, the Government’s own impact assessment clearly acknowledges the harm this policy will cause. If you know that your actions will cause harm and you go ahead anyway, that is a deliberate act. So, if the Government are not prepared to listen, including to the Resolution Foundation, the only conclusion we can reach is that the Government intend, knowingly and deliberately, to damage the life chances of young and vulnerable people. Do they really want to do that? Please, Minister, take this seriously.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, I oppose Motion E1, which is unnecessary. Under the Employment Rights Bill, employers can still dismiss workers fairly—for example, as they can now if they are incompetent or there is misconduct or a redundancy situation. But without the day one protection proposed by the Government, when workers move to a new job, they would continue to bear the risk that they can be sacked at whim.

I encourage noble Lords to put themselves in the shoes of a worker, who in good faith leaves a secure job where they have completed the qualification period with protection against unfair dismissal to take up a new post, and who then finds themselves sacked, out on their ear, stripped of a livelihood for no good reason.

I also remind noble Lords that many groups of workers are already protected against unfair dismissal from day one, as their dismissal would be deemed automatically unfair—for example, if they are pregnant, on family leave or are a trade union rep, or, indeed, if they are a whistleblower. The Government simply intend to extend that protection to all workers. In addition, if someone thinks they have been unfairly dismissed because of race, sex or another protected characteristic, this could be discrimination. They could make a claim to an employment tribunal for both discrimination and unfair dismissal, and for that discrimination claim, workers do not have to meet that qualifying period of two years.

Finally, so far, I have heard little mention of the thorny issue of job mobility in this country, which economists agree is a significant barrier to economic growth and productivity. In the UK, reports show that job mobility has fallen badly—according to one report, dropping by 25% over a period of barely two decades. Poor job mobility is bad for workers—they have less chance of improving their wages if they stick in the same job—and bad for the economy, because we are failing to move workers fast enough into areas of growth. Under the previous Government, we saw insecure contracts at work soar. In 2012, the Conservative-led Government shamefully doubled the qualification period for protection against unfair dismissal to two years, stripping workers with less service of protection at the stroke of a pen.

I am very conscious of the employer lobby that has mobilised in support of this amendment. But when I look back on employers’ opposition to the national minimum wage, to equal pay for women and to stronger health and safety rights, it is clear that business lobbies do not always know what is best for Britain. Labour’s manifesto commitment is clear—to deliver day-one rights in full. I hope that noble Lords will join me in opposing this amendment.