The Employment Rights Bill represents the most significant change to employment law for many years. The government is trumpeting 28 separate measures to improve employee rights, covering a wide range of policy areas. 

However, we are still waiting for much of the detail about how the changes will operate in practice. There will be further consultations on a range of issues and many of the changes will not come into force until 2026. This means that there is still time to shape the design of the legislation and businesses should be engaging with government and parliament now to get it right.

What’s in the Bill?

The key measures in the Bill include:

• Day one protection against unfair dismissal. There will be a statutory probationary period, suggested as nine months, during which employers will be able to follow a “lighter touch” process to dismiss someone fairly for performance reasons. The government will consult on how that process should operate and the changes will not happen until Autumn 2026 at the earliest.
• Day one rights to paternity and unpaid parental leave. Statutory sick pay will be payable from day one of an absence, removing the current three day waiting period. Employees will not need to have wages above the lower earnings limit to qualify for sick pay.
• Introducing bereavement leave as a day one right.
• Making flexible working the default, so employers will have to agree to flexible working requests unless they can show that their refusal is reasonable.
• Giving pregnant employees, and those on or who have recently returned to work from maternity leave more protection against dismissal, by making it unlawful to dismiss them other than in specific circumstances.
• Requiring large employers with 250 or more employees to have action plans to address their gender pay gaps and to support employees during the menopause.
• Ensuring that workers on zero or low hour contracts can have a contract reflecting their regular hours over a defined period.
• Closing “loopholes” permitting fire and re-hire/ fire and replace by making such dismissals automatically unfair in some circumstances and consulting on removing the current cap on protective awards if collective redundancy processes are not followed.
• Strengthening protection against sexual harassment by requiring employers to take “all” reasonable steps to prevent such harassment, prohibiting third party harassment and extending whistleblowing protection to cover disclosures about sexual harassment.
• Repealing trade union legislation relating to minimum service levels and the tougher rules on strike ballots introduced in 2016, as well as simplifying the statutory recognition process and introducing a new right for trade union officials to access workplaces.
• Creating a “Fair Work Agency” (sometimes referred to as a single enforcement body), to enforce rights such as holiday pay, the minimum wage and statutory sick pay.

And what isn’t?

Not everything in the Make Work Pay plan has made it into the legislation. The government has also published a “Next Steps” document outlining reforms that will be taken forward in the future, subject to consultation. These include:

• A right to switch off;
• Mandatory ethnicity and disability pay gap reporting;
• A move towards a single worker status, removing the current distinction between employees and workers; and
• Reviewing existing parental and carer’s leave frameworks, in particular in relation to whether carer’s leave should be paid.

Next steps

The Bill will now make its way through Parliament. Its second reading will take place on 21 October and given the strength of political will, we anticipate that it will move promptly to Committee, with the potential for Commons stages to be completed by Christmas, or early January, before it moves to the Lords. Despite the Government majority, amendments to the Bill are possible and it is vital that any issues are raised promptly.

Employers should be identifying the key issues in the Bill for their business and actively engaging with the government and parliamentarians now.

There will also be further consultations on the detail of how many of the new rights will operate in practice during 2025, and the government has confirmed that the majority of the changes will not be in force before 2026. These are important, but waiting for the consultations is a huge opportunity lost and often too late to influence government thinking. If there are issues you are seeking to resolve, we can help you to develop and advocate for credible design solutions as you engage with government and the legislative process. Please get in touch.
 

Authored by Jo Broadbent, Anvita Sharma, and Stefan Martin, with input from Charles Brasted and Nikki Da Costa.