The government’s Employment Rights Bill was again defeated in the House of Lords last night, but only by 24 votes on one final remaining issue of contention. 

Following the surprise announcement at the end of November that compromise had been found on unfair dismissal rights - moving from day 1 of employment to a 6 months qualifying period - it was expected that the Lords’ would likely allow the Bill to pass. 

However, a late stage curveball quickly came to light revealing that the 6 months’ proposal is tied with a complete removal of the statutory cap for unfair dismissal compensation awards. This move has not been welcomed by some who fear it could lead to considerable financial consequences in some instances, for some employers. 

An amendment to address this issue was narrowly voted in by the House of Lords yesterday, which means that the Bill must now return to the Commons once again. The amendment would require the government to conduct a review/consultation of their plan to abolish the cap on unfair dismissal compensation within three months of the Bill being passed. 

We now wait to see whether the Commons will accept or reject this amendment, and if time will be found for the Bill to return to the Commons to decide this before the Christmas recess on 19 December.

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