UK Softens Workers’ Rights Bill After Pushback
The UK government has scaled back its plans to strengthen protections against unfair dismissal, announcing on Thursday that employees will gain the new rights six months after starting a job, rather than from day one as initially proposed. The amendment followed concerns from business groups, which warned that the original proposal would hinder hiring and increase operational risks.
According to the government’s update, the shift removes the final major barrier to passing the Employment Rights Bill, a central component of Labour’s legislative agenda.
Unions offered a mixed response. While they welcomed the reduction of the current two-year qualifying period for unfair dismissal rights and praised new day-one benefits such as sick pay and paternity leave coming into force in April 2026, the Unite union criticised the bill as a “shell of its former self.”
“Without banning fire-and-rehire practices or zero-hours contracts, the Bill has become unrecognisable,” Unite said.
Business and Trade Secretary Peter Kyle defended the revised legislation, telling Sky News it aims to create “more harmony and engagement in the workplace, increased productivity, never pitting one side against another.”
The bill — a key Labour manifesto pledge — also intends to curtail what the government views as exploitative zero-hours contracts and end fire-and-rehire tactics. Despite having one of the highest minimum wage-to-median earnings ratios in the OECD, the UK still lags behind other advanced economies in statutory benefits such as paid sick leave and parental leave.
Britain’s economy has struggled with slow growth since the 2007–08 financial crisis, and both Finance Minister Rachel Reeves and Prime Minister Keir Starmer have promised to reverse this trend after Labour returned to power in 2024 following 14 years in opposition.
Opposition leader Kemi Badenoch condemned the policy shift as a “humiliating U-turn,” arguing that the bill still includes measures that could harm businesses and hinder economic growth. The announcement came just one day after Reeves introduced £26 billion in tax increases in her annual budget.
Major business organisations — including the CBI, British Chambers of Commerce, and Federation of Small Businesses — welcomed the amendment, saying it maintains a “simple and meaningful” qualifying period consistent with existing legislation. They also called for ongoing dialogue on issues such as guaranteed hours and seasonal work.
British Retail Consortium CEO Helen Dickinson described the change as “an important, practical step.”
The government says the reforms are crucial for improving working conditions and preventing the widespread industrial action that dominated the past two years. Most measures will not take effect before 2026, with further consultations planned on secondary legislation. Officials also pledged that any future changes to the unfair dismissal qualifying period would require primary legislation, alongside plans to remove the cap on compensation.
Prospect union General Secretary Mike Clancy welcomed aspects of the bill, noting that lifting the compensation cap strengthens worker protections and simplifies the system.
“This is a good deal for working people,” he said, “negotiated by trade unions focused on securing practical improvements to workers’ rights.”
Source: Reuters
