UK waters down unfair dismissal plan after business pushback
By Sam Tabahriti
LONDON (Reuters) – The British government watered down plans to strengthen workers’ protection against unfair dismissal on Thursday, saying employees will be entitled to new rights six months after starting work rather than from day one as originally planned.
The government said in its update that the change, which followed discussions with businesses who warned the initial proposals would make hiring more difficult, removes the last major hurdle to the Employment Rights Act becoming law.
The revised bill received mixed reactions from unions. They welcomed the reduction of the current two-year waiting period for redundancy rights and other new protections, including first day entitlements to sick pay and paternity leave from April 2026.
But major union Unite described the bill as a “shell of its former self”.
“The bill is already unrecognizable by not banning firings, rehiring and zero-hour contracts,” he said.
MAKE A KEY COMMITMENT
Trade and Commerce Minister Peter Kyle told Sky News the legislation was designed to “enable greater cohesion and inclusion in the workplace, increase productivity and never pit one side against the other”.
The bill, a key commitment in Labour’s manifesto, also aims to ban what the government calls exploitative zero-hours contracts and end the practice of firing and rehiring.
The UK is among the top OECD countries for minimum wage compared to average earnings, but offers fewer statutory benefits such as paid sick leave and parental leave than most developed economies.
The British economy has been mired in a period of largely slow growth since the 2007-08 financial crisis; Chancellor of the Exchequer Rachel Reeves and Prime Minister Keir Starmer have promised this will end when Labor comes to power in 2024, after 14 years.
Kemi Badenoch, leader of the opposition Conservative Party, described the change as a “humiliating u-turn” and said the bill still contained measures that would “hurt businesses and be terrible for economic growth”.
The move comes a day after Reeves announced a 26 billion pound ($34.41 billion) tax increase in his annual budget.
Six major business groups, including the Confederation of British Industry (CBI), British Chambers of Commerce and the Federation of Small Businesses, welcomed the change on Thursday, saying it “maintains a qualification period that is simple, meaningful and understandable within the framework of existing legislation”.
They called for continued dialogue on issues such as guaranteed hours contracts and seasonal work.
