The UK Government recently unveiled the long-anticipated Employment Rights Bill on 10 October, promising the most substantial overhaul of employment law in a generation. While full implementation is not expected until 2026, the bill introduces 28 key reforms that will affect both businesses and workers. These include changes to unfair dismissal rights, maternity protections, flexible working, and zero-hour contracts, among others. With much of the detail still under consultation, businesses should begin preparing now to stay ahead of the upcoming changes.
Day-One Rights and Unfair Dismissal
One of the bill's most notable reforms is the introduction of day-one rights for employees, significantly expanding protections from the first day of work. This will include rights to paternity, parental, and bereavement leave, along with protection from unfair dismissal.
Currently, employees must have two years of service before bringing an unfair dismissal claim. Under the new bill, this qualifying period will be scrapped, potentially leading to a surge in tribunal claims. To address this, a statutory probation period is proposed, with variations in dismissal rules during this time. The final details, including a proposed nine-month probation period, will be decided after consultation in 2025.
Maternity Protection, Flexible Working, and Zero-Hour Contracts
The bill strengthens maternity protections by extending redundancy protection for women who are pregnant, on maternity leave, or within six months of returning to work. These enhanced protections will also apply to paternity and adoption leave.
Additionally, the bill enhances the right to request flexible working. Employers who deny such requests will need to provide a written, reasonable explanation. This change is expected to be enforced after a short consultation period.
The bill also tackles the contentious issue of zero-hour contracts by introducing guaranteed hours and compensation for short-notice shift cancellations. These protections may extend to agency workers, though final details are pending.
Harassment and Fire and Rehire Practices
New provisions place a duty on employers to take all reasonable steps to prevent harassment based on protected characteristics. This will require businesses to update policies and training to comply with the strengthened rules.
Another controversial area, fire and rehire, will face new restrictions. Employers who use this practice to reduce workers' terms and conditions may face automatic claims of unfair dismissal, except in cases of severe financial distress.
Collective Redundancy and Statutory Sick Pay
The bill modifies collective redundancy laws, requiring consultations even when redundancies span multiple business locations. This is likely to impact larger employers with multiple sites.
Changes to statutory sick pay are also proposed, removing the three-day waiting period and the lower earnings limit. While this provides greater security for workers, it will increase costs for businesses with low-wage employees.
Impact on Workers and Businesses
According to government analysis, the bill could benefit around 10 million workers, particularly those in low-paid or insecure jobs. Groups such as women, younger workers, and minorities stand to gain the most from increased job security and improved working conditions. Paul Nowak, General Secretary of the TUC, welcomed the changes, stating that raising employment standards would boost living standards and productivity.
However, businesses face significant costs, with the reforms expected to increase firms' expenses by £5 billion per year. Companies in low-wage sectors may be particularly affected, as reforms to day-one rights, and zero-hour contracts could reduce hiring. While the government plans to consult with SMBs to mitigate these impacts, the changes will still pose challenges for smaller businesses.
Preparing for Change
Businesses are encouraged to start aligning their HR policies with these proposed legal changes. The CIPD Annual Conference in Manchester on 6-7 November will serve as a key platform to discuss the future of work, including the Employment Rights Bill, workplace conflict, and employee experience.
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