Employment Rights Bill: Government motion to disagree with the Lords in their Amendment 120N to Commons Amendment 120G and their Amendments 120P to 120S to Commons Amendment 120H

Parliament voted on 15 December 2025 to reject Lords amendments that would have preserved the existing cap on compensation awards in unfair dismissal cases. The government's motion to disagree with the Lords passed by 311 votes to 96. This was the fourth round of parliamentary ping-pong (the back-and-forth process by which the two chambers negotiate over legislation) on the Employment Rights Bill, with the Lords having repeatedly blocked this and other provisions. The vote means the compensatory award cap for unfair dismissal, currently set at £118,223 or 52 weeks' gross pay, will be removed when the legislation takes effect. In practice, the government argued, this matters less than opponents suggest: the median unfair dismissal award in 2023-24 was £6,746, and only around 2 per cent of all employment tribunal cases result in a compensation award for unfair dismissal at all. Ministers also argued that removing the cap reduces a systemic incentive for claimants to construct more complex tribunal cases in order to reach higher awards, potentially speeding up the tribunal system. Opponents contended that uncapped liability makes the UK an international outlier and creates uncertainty for businesses, particularly those that are internationally mobile. The vote divided almost entirely along party lines. All 276 Labour MPs and 29 Labour and Co-operative MPs who voted supported the government motion. All 90 Conservatives who voted opposed it, joined by 3 Democratic Unionist Party MPs, 2 Reform UK MPs, and 1 each from the Ulster Unionist Party, Traditional Unionist Voice, and Restore Britain. Four independents and all 3 Green MPs voted with the government. There were no cross-party rebels recorded in either direction. Deputy Prime Minister Angela Rayner intervened during the debate to highlight that 33 hereditary peers had voted against the government in the Lords, framing the Lords' resistance as an obstacle to a manifesto commitment.