Employment Rights Bill

Baroness Lawlor Excerpts

Report stage
Wednesday 16th July 2025 Lords Chamber

[Lord Phillips of Worth Matravers (CB)]

If there is not to be a sensible probation period, is any employer going to have the courage to take on an ex-offender?

[Baroness Lawlor (Con)]

My Lords I support the amendments in this group because they would mitigate the potential damage to employment from the perspective of both the employer and the employee, whether that employee is a jobseeker or someone recently appointed. The danger exists particularly in this clause. As your Lordships know, Clause 23 and the linked Schedule 3 repeal Section 108 of the Employment Rights Act 1996. They remove the qualifying period of employment and make further amendments to the Act in respect of the repeal.

Section 108 stipulates that the protection under Section 94 of the Act, which establishes the right not to be unfairly dismissed, subject to certain conditions, does not apply to the dismissal of an employee unless he has been continuously employed for two years. During this two-year extended training period—for that is what it is, and I speak as an employer—when you induct a new employee, you know that if they do not work out, and there are clear headings governing this under law, they can be let go without unfair dismissal claims.

Now, that is to be removed by Clause 23 and Schedule 3. We are repealing Section 108 of the 1996 Act, one of the basic building blocks of employment law in this country. This is one of the most familiar and important pieces of legislation for the labour market. As my noble friend Lord Sharpe and the noble Lord, Lord Vaux of Harrowden, have said, it helps offer protection to both parties. It makes for a fluid labour market and avoids the zombie businesses which do little for the wider economy and militate against growth.

I will not go through each of the amendments because noble Lords have heard about them already, but they would facilitate good working practices for both parties. Those looking for a job would be more likely, as we have heard, to be appointed. There will be more job vacancies, which, as we know, have sadly fallen and continued to fall over the last year. Those looking for a job would be more likely to find one and more likely to start their first job, as we have already heard today. The employer would be able to take a risk, as we have heard today—to take a chance on a new employee.

Taking on a new employee involves a great commitment. It involves the commitment not only of a salary, which is only a small fraction of the cost, but of time, training, patience, showing the ropes and bringing someone into the culture of the organisation, so that they can contribute as a happy, contented, productive and effective member of the team. With this clause, we will not have the protections of that. I cannot think of any small employer who will not think twice about taking on a new person, and this will have very bad effects on the economy and growth.

We know there are legal grounds already for unfair dismissal in respect of the job itself. They include conduct, capability, redundancy, legal restrictions on employment and other substantive reasons. Noble Lords have spoken about these today, but there are cast-iron reasons for not being unfairly dismissed. You cannot be dismissed as a whistleblower or for discrimination, and these do not require the two-year qualifying period. The law takes care of this.

Now, with the removal of the two-year period goes the protection for the employer and the opportunities for new employees particularly, but also for many employees who want to change jobs and start a new walk of life. They may find they are not so good at what they were doing and want to try their hand at a new job. They need time to settle in, just as the new person coming into their first job does.

I am not at all convinced that this initial period, which Ministers have told us will have a lighter touch in respect of unfair dismissal arrangements, will actually be very helpful. Some law firms fear that it will impose pretty much the same strictures on an employer. We really need to know from the Minister what exactly the period will be and what the arrangements for unfair dismissal during that period will be, because I cannot see how we can have a Bill setting all this out when we do not know what is intended.

Like other noble Lords, I would value some statement. I do not need to refer to the compliance cost, the impact assessment that estimates hundreds of millions of pounds, or the additional complexity in the recruitment process. Added to the other measures in the Bill, Clause 23 and Schedule 3 add a new dimension of insecurity.

If we are to have businesses, particularly small businesses, willing to grow, to raise productivity as the Government want and to hire the new employees needed to raise that productivity, the Government should welcome Amendment 49 and all the amendments in this group. They accept the spirit of the manifesto pledge and go some way in helping the Government to get out of the mess, which is of their own creation.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, this Government were elected on a manifesto to provide unfair dismissal protection from day one of employment—not two years, not six months, but day one. To deliver this commitment, we will remove the qualifying period for these rights.

The Government recognise that, from time to time, employers will need to fairly dismiss an employee for a fair reason. We expect that most employers already fairly dismiss employees, and the process need not be too arduous. Our changes will not prevent fair dismissal. An employee who has been working in the job for some time but whose performance has dipped will continue to have the standard protections against unfair dismissal. However, the Government believe that it is not right to expect employers to have to meet the same standards in the first few months of employment when they are assessing their newly hired recruit and deciding whether that person can deliver what the employer expects. This is why our policy creates a statutory probationary period, during which light-touch standards for dismissal relating to an employee’s performance and suitability will apply.

The noble Baroness, Lady Lawlor, asked what length the probationary period would be. As we have said previously, the Government’s preference is for nine months. We intend to consult on the duration and how the light-touch standards will operate. The current two-year qualifying period is designed not as a training period but a qualifying period before the individual can claim unfair dismissal. If the amendments tabled by the noble Lords, Lord Sharpe and Lord Vaux, were to be accepted, employees would still have the threat looming over them of being fired arbitrarily.

Amendment 51 preserves the policy in the Bill of exempting a dismissal due to a spent conviction for many qualifying periods—a point raised by the noble and learned Lord, Lord Phillips. I am pleased that the noble Lords agree with the Government’s policy, at least to that extent.

However, I can tell the noble Lord, Lord Vaux, that the Government do not believe in protection for some workers in some limited circumstances; instead, they believe in protection for all employees, benefiting 9 million people. The noble Lord spoke about the needs of young people looking for work. Of course we identify with that, and the Government are committed to supporting people as they take their first steps into the world of work or return to work. As the Prime Minister set out on the Get Britain Working White Paper in November 2024:

“Our country’s greatest asset is its people”.


As I explained in Committee, we are

“transforming the apprenticeship levy into a new growth and skills levy that will deliver greater flexibility”

for learners and employers

“aligned with the industrial strategy”.

This will include

“shorter duration and foundation apprenticeships in key sectors, helping more people to learn new high-quality skills at work, fuelling innovation in businesses across the country, and providing high-quality pathways for young people”.—[Official Report, 21/5/25; col. 305.]

We also intend to limit unpaid internships for those who are part of an education or training course. The law is clear that, if an individual is classed as a worker, they are entitled to at least the national minimum wage and anyone eligible must be paid accordingly.

Beyond enhancing learning on the job and ensuring that a fair wage is paid for young people’s work, we also believe that all employees should be provided with security of work through protections from being fired arbitrarily. It is no less distressing to lose a job at the start of your career than at any other point in the years that follow. However, the Government recognise that employers use probationary periods to assess new hires’ performance and suitability for their role. We will ensure that UK businesses can hire with confidence.

The noble Lord, Lord Sharpe, talked about social mobility. We recognise that good employers take a chance on what we might call “rough diamonds” up and down the country. The valuable time that employers take to support new hires by developing their skills and their talents on the job is not recognised often enough. The statutory probationary period will enable this, with light-touch standards for fair dismissals. We have said explicitly that our intention is to provide for a less onerous approach for businesses to follow to dismiss someone during their statutory probationary period for reasons to do with their performance and suitability for the role. Of course, that will apply equally to healthcare employees.

The noble Lord, Lord Sharpe, talked about potentially increasing the number of tribunals. Provided that the employer can show that the reason for dismissal was fair, they should have no concerns about the outcome, as nothing is really new from the current situation.

The noble Lord, Lord Hogan-Howe, asked about police officers. I understand that they are excluded from the existing legislation, as they would be from the Bill. In that sense, there is no change.

Noble Lords have raised the issue of a cultural fit, which, of course, can mean many different things. “Not a good fit” is often used euphemistically to refer to attributes such as an employee’s work ethic, their level of commitment to the job, or how they interact with their colleagues. In many situations, these reasons will fall into the category of dismissal for conduct or capability, to which the new light-touch standards will apply. If the cultural fit is linked to a protected characteristic then of course dismissing someone for that reason could lead to discrimination claims, and the Bill does not affect that.

Beyond these reasons for dismissal, which clearly fall within the conduct and capability category, the Government will carefully consult on what other kinds of “some other substantial reason” dismissals should also be subject to those light-touch standards. The Bill contains a power for the Government to define what a “some other substantial reason” dismissals “relating to the employee” should mean. As I have noted, the intent is to define what relates to an employee’s performance and suitability for their role. We will welcome employers’ and trade unions’ input on that important issue. However, these amendments would remove the Government’s statutory probationary period to enable light-touch standards for fair dismissals for the first nine months of employment.

Noble Lords asked about consultation. We have already consulted on the proposals, and we are continuing to engage with trade bodies and trade unions prior to publicly consulting later this year. The Secretary of State for Business and Trade issued a letter to stakeholders on Thursday 26 June, which outlined the fundamental principles that are guiding the Government’s development and implementation of day-one rights to unfair dismissal protections and invited stakeholders to engage on the detail of the policy. Should your Lordships be interested, I have now placed a copy of that letter in the House Library. I should also say to the noble Baroness, Lady Neville-Rolfe, that the road map shows that these day-one rights, including protection from unfair dismissal, will not be introduced before 2027.

In the meantime, these amendments would not deliver on the Government’s manifesto commitment to introduce a day-one right against unfair dismissal, leaving many newly hired employees without robust employment protections. I therefore ask noble Lords not to press their amendments.

Finally, my Amendment 52 is simply a minor technical amendment that corrects a cross-reference in Schedule 3. With that, I ask the noble Lord to withdraw Amendment 49.

[Baroness Lawlor (Con)]

Before the Minister sits down, is nine months now the Government’s official position on the initial period? If it is, can they confirm what they are minded to put into their light-touch unfair dismissal arrangements?

[Baroness Jones of Whitchurch (Lab)]

My Lords, as we have said before, we will continue to consult on this but that is our preferred option at this stage. We think that is a reasonable balance between the current arrangements and some of the proposals we have before us today.