Keir Starmer retreats on 'day-one' workers' rights after business revolt

"The government has dropped its flagship plan to give workers the right to claim unfair dismissal from day one, abandoning a key Labour manifesto pledge after an intense backlash from employers and a parliamentary standoff in the House of Lords. Instead, the qualifying period for unfair dismissal claims will be set at six months, following two days of negotiations between government ministers, trade unions and business groups."

"Lisa Nandy, the culture secretary, said the government had reached an "impasse" with the Lords, which refused to support day-one dismissal rights. "Unfair dismissal was the sticking point," she told Times Radio. "We brought together trade unions and business leaders and they've negotiated a compromise. These rights will now come into force in six months. Treating this as a zero-sum game is how we got into this in the first place.""

"TUC general secretary Paul Nowak urged peers to pass the bill quickly, despite disappointment among unions. "The Employment Rights Bill is essential to better-quality, more secure jobs," he said. "The absolute priority now is to get these rights - like day-one sick pay - on the statute book by next April.""

The government abandoned plans to allow unfair dismissal claims from day one and agreed a six-month qualifying period after two days of talks with ministers, trade unions and business groups. The compromise aims to enable the Employment Rights Bill to pass before April 2026. The culture secretary described an impasse with the House of Lords, which would not back day-one dismissal rights, and framed the outcome as a negotiated compromise. Unions expressed unhappiness and a minister called the decision "total self-destruction." The TUC urged peers to pass the bill quickly and prioritized securing day-one sick pay by next April.

Read at Business Matters