With all the excitement over the Budget 2025 and the inevitably busy school calendar leading up to Christmas, schools can be forgiven for missing yet another Employment Rights Bill (ERB) update. In a major U-turn from one of its key proposals under the ERB, the Government has abandoned “day 1” unfair dismissal rights in place of a six-month qualifying period. Our Schools HR team consider what this means for schools and trusts.
Background to ‘day 1’ unfair dismissal rights proposal
By way of background, the proposal to make unfair dismissal a “day 1” right was in the Government’s manifesto and the headline grabber when the ERB was first announced on 10 October 2024 (see our October 2024 ERB update here). It was the main talking point and one of the biggest areas of concern for schools as employers.
Resistance by the House of Lords
In order for any bill to become law it must go through various stages, starting in the House of Commons, moving to the House of Lords, and then the final stage of receiving Royal Assent before becoming law.
When the ERB came before the House of Lords there were a number of push backs including in relation to the proposed “day 1” unfair dismissal rights. The Lords suggested an amendment to include a six-month qualifying period and sent the matter back to the House of Commons. As expected the Government insisted on the “day 1” rights and back the ERB went to the House of Lords. Experts predicted that the Lords would note their dissatisfaction but agree to the Government’s position since it was a manifesto pledge, however they continued to insist on six-months and a game of legislative “ping pong” ensued. In their most recent debate on 17 November 2025 the Lords maintained their position, expressing concern over the impact on employment rates and the (already overburdened) employment tribunal system if the “day 1” proposal was implemented. This deadlock position potentially put the Government’s timeline and roadmap for the ERB in jeopardy.
U-turn and new six-month qualifying period
On the evening of 27 November 2025 the Government conceded on the issue and issued a press release confirming:
- the qualifying period for unfair dismissal would reduce from the current 2 years’ to 6 months (whilst maintaining existing day one protection against discrimination and automatically unfair grounds for dismissal);
- a commitment to ensure that the unfair dismissal qualifying period can only be varied by primary legislation;
- a commitment to lift the compensation cap in unfair dismissal claims.
What does this mean for schools?
This will no doubt be a welcome change to the original “day 1” proposal. However, there are a number of issues that arise.
The suggestion in the press release that this change will be made by primary legislation, as opposed to the powers to amend under the Employment Rights Act 1996, means that it will be more difficult for a future government to change the qualifying period.
Further the reference in the press release to the compensation cap being lifted is vague and raises further questions. Compensation in unfair dismissal claims (where there is no discrimination, whistleblowing or automatically unfair dismissal claimed) is capped at the lower of either a year’s gross pay or a statutory limit, which is currently £118,223 as of April 6, 2025. It is not clear from the press release whether only one of these caps will be removed (and if so, which one) or both and it is proposed that compensation is unlimited. Further clarification will be required.
The Government’s capitulation on the original “day 1” unfair dismissal proposal may in fact put employees in a worse off position. Schools will have a shorter period in which to determine an employee’s suitability for the role than the current 2 years, meaning that decisions to dismiss will need to be made sooner, thereby leaving people unemployed much sooner. Based on the current qualifying service, if a school had some doubts about an employee at the six-month point but which it did not consider serious enough to terminate employment, it would more likely than not continue with the employment for a further period before making a decision on termination, safe in the knowledge that the individual does not have ordinary unfair dismissal rights before they acquire 2 years’ service. However, with the six-month qualifying period, in the same scenario schools will more likely than not terminate the employment much earlier to avoid an unfair dismissal claim. This situation seems to create the opposite of what the Government were looking to achieve with the original proposals and its commitment to workers’ rights. There is concern that this capitulation may be a sign of things to come and that there will be further dilution of the original ERB proposals.
What should schools do now?
It remains the case that the ERB is not yet law, so immediate change is not required. The Government’s roadmap for this change taking effect is not before 2027.
However, now that the qualifying service for unfair dismissal has been clarified (and will likely now be approved by the House of Lords as it reflects their amendment) schools should start preparing. This may include but is not limited to:
- Tightening up recruitment processes to ensure good practice and robust decision making are in place in good time;
- Reviewing contracts of employment and implementing probationary periods;
- Reviewing the length of contractual probationary periods;
- Reviewing or adopting probation policies to ensure parity in the way dismissal during probation is handled and reduce the risk of discrimination claims;
- Take legal advice from expert education-employment lawyers.
For our previous updates on the ERB please visit our ERB tracker.
If you have any questions about the Employment Rights Bill and what this means for your school or MAT, or you require any advice or assistance with a schools HR or employment law matter, please contact our dedicated Schools HR helpdesk on 0345 026 8690 or schoolshr@wslaw.co.uk.