The Employment Rights Bill is to be a major piece of employment legislation, all part of Labour’s commitment to “Make Work Pay”. It was published in October 2024, and you can find our earlier article on the proposed changes (not due to come in before at least Autumn 2026) here.
The Government has tabled a number of amendments to the Employment Rights Bill following various consultations that were launched last October. These amendments are to be considered at the House of Commons report stage as the Bill makes its way through the various stages.
What’s in the Employment Rights Bill?
Unfair dismissal and probationary periods
Unfair Dismissal / Probationary period
Current law
Employees must have worked for their employer for a minimum of two years before qualifying for the right to claim ‘ordinary’ unfair dismissal.
Proposal under Employment Rights Bill
The government is repealing the two-year qualification period for employee protections against unfair dismissal.
There will be a statutory probation period during which businesses will be allowed to fairly dismiss someone who is not right for the job on a “lighter touch” basis. The exact duration is yet to be determined, although the government favours nine months.
Employers will retain the ability to run separate contractual probation periods of any length they choose.
Zero hours contracts
Zero hours contracts
Current law
Currently, zero-hour contracts are permitted but cannot include exclusivity clauses preventing the employees from working elsewhere.
Proposal under Employment Rights Bill
The bill aims to end one-sided flexibility and exploitative zero-hour contracts.
Right to guaranteed hours: The bill will require employers to offer qualifying workers guaranteed hours reflecting the hours they regularly work over the reference period. The reference period will be set out in regulations but is expected to be 12 weeks. Employees will be able to reject this offer of guaranteed hours and remain on a zero-hour contract should they wish.
Right to reasonable notice of shifts and shift changes: The bill will require employers to provide workers with reasonable notice of shifts and shift changes. What is reasonable will depend on the circumstances, but there will be a minimum period of time (not yet defined).
Right to payment for shifts cancelled, curtailed, or moved at short notice: The bill will require employers to make payments to workers if they cancel, move or curtail a shift at short notice.
These provisions will apply to agency workers. Both the agency and the hirer will be responsible for providing an agency worker with reasonable notice of shifts. Agencies will be required to make short-notice payments to agency workers and will generally be able to recoup these costs in situations where the hirer is responsible.
Redundancy and restructuring
Fire and rehire
Current law
Employers may dismiss employees before offering to re-engage them in the same roles, as a means of changing their terms and conditions of employment. Currently, employers can use fire and rehire where they have a sound business reason to change a contract of employment as a last resort, following the statutory code of practice on dismissal and re-engagement, which came into force on 18 July 2024.
Proposal under Employment Rights Bill
The bill restricts the ability to use fire and rehire by amending the law on unfair dismissal. Where employees are dismissed for failing to agree to a change in their contract or the employer dismisses the employee to replace or re-engage them on varied contractual terms, those dismissals will be automatically unfair unless the employer can demonstrate that it was necessary due to financial difficulties and that no reasonable alternative existed.
Public Sector Outsourcing (Protection of Workers)
Current law
Currently, there is a ‘two-tier workforce’ in which employees who are ex-public sector and private sector but performing the same tasks are treated differently in respect of their employment terms and conditions, following the transfer of public contracts.
Proposal under Employment Rights Bill
The bill will ensure that specified workers are treated no less favourably than their counterparts on the same contract.
Collective Redundancy
Current law
Employers who propose 20 or more redundancies at a single establishment within a 90-day period or less must collectively consult the appropriate representatives of the employees before making any redundancies. If they don’t, employees can claim a protective award of up to 90 days’ pay.
Proposal under Employment Rights Bill
Collective consultation will be triggered where 20 or more redundancies are proposed at one establishment or a threshold number of employees are proposed to be made redundant across the employer’s organisation. The threshold number will be set in regulations.
The bill allows the Employment Tribunal to award up to 180 days’ pay against the employer, rather than the current 90 days maximum for the protective award.
Sickness
Statutory sick pay
Current law
Statutory Sick Pay (SSP) is payable from the fourth day of sickness absence. Employees must earn at least £123 per week to qualify.
Proposal under Employment Rights Bill
Statutory Sick Pay will be payable from day one of sickness absence. The requirement to earn at or above the lower earnings limit will be removed, allowing all eligible employees to receive SSP. For those earning below the lower earnings limit, 80% of their average weekly earnings will be paid, or £118.75, whichever is lower.
Family rights / work-life balance
Paternity leave
Current law
Qualification for paternity leave currently requires 26 weeks of continuous employment.
Currently, when shared parental leave is taken, fathers or partners lose their right to take any paternity leave they have not already taken.
Proposal under Employment Rights Bill
Paternity leave will become a day-one right, removing the qualifying period. The notice period will remain unchanged, requiring 15 weeks’ notice before the expected week of childbirth, or as soon as reasonably practicable.
The bill will remove the restriction on taking paternity leave after taking shared parental leave, providing more flexibility for employees.
Parental leave
Current law
Qualification for parental leave requires one year of continuous employment.
If they qualify, the parent can take up to 18 weeks of unpaid parental leave for each child until the child is 18 years old.
Proposal under Employment Rights Bill
Parental leave will become a day-one right, removing the qualifying period. The notice period will remain unchanged, requiring 21 days’ notice or as soon as reasonably practicable.
Bereavement leave
Current law
There is currently no statutory right to bereavement leave, except for parents who lose a child from 24 weeks of completed pregnancy until the age of 18.
Proposal under Employment Rights Bill
The Bill will establish an entitlement to bereavement leave. This will be a day one right for employees following the death of a close relative or other person (to be defined). Secondary legislation will provide details of who will be eligible to take bereavement leave through the relationship to the deceased and how the leave can be taken.
Flexible working
Current law
Employees have the right to request a flexible working arrangement from their first day in a job. They can ask their employer for a flexible working arrangement twice in every twelve months, and their employer must give their decision within two months. Requests can only be turned down on the basis of one of the 8 specified business reasons. There is currently no requirement for employers to explain their decision.
Proposal under Employment Rights Bill
The Bill will require that employers must explain why it was reasonable to turn down a request on the basis of the ground/s selected from the eight specified business reasons.
Right to switch off
Current law
Currently, there is no explicit right to disconnect in UK law.
Proposal under Employment Rights Bill
The government previously indicated that it would deliver a right to switch off through a statutory Code of Practice. However, recent press reports have suggested that the government is now unlikely to move forward with this proposal.
Equality, diversity & discrimination
Harassment
Current law
Employers must take reasonable steps to prevent sexual harassment of employees and workers during employment.
Proposal under Employment Rights Bill
The Bill will introduce a wider scope where employers are required to take “all” reasonable steps to prevent sexual harassment in the workplace.
Equality action plans
Current law
Employers with 250 or more employees must publish specific gender pay gap data annually on a publicly available government website.
Proposal under Employment Rights Bill
In addition to gender pay gap reporting, employers with 250 or more employees will be required to publish equality action plans and identify the providers or employers of any contract workers they engage.
Menopause action plans
Current law
There are no proactive obligations for employers to take steps relating to employees with menopause.
Proposal under Employment Rights Bill
New regulations will require employers with 250+ employees to produce and publish menopause action plans as part of an Equality Action Plan. The regulations will include specific penalties for not doing so.
Enhanced dismissal protections for pregnant women and new mothers
Current law
Pregnant women and new mothers have enhanced protections against redundancy dismissal. These protections give women the right to be offered suitable alternative roles if available, and place them ahead of other employees also at risk of redundancy during the protected period (from informing the employer of pregnancy to 18 months after the expected date of childbirth).
Proposal under Employment Rights Bill
The Bill will add an ‘additional layer’ of protection, making it unlawful to dismiss pregnant women, and mothers on maternity leave, or in the six months after they return to work (except in specific circumstances).
The government will have the power to introduce further regulations to cover other dismissals during pregnancy, maternity leave or following return to work.
These protections will apply to other types of family-related leave.
Collective representation
Trade Unions
Current law
There are strict rules for Trade Unions.
Trade Unions have no general right to access workplaces for recruitment and organisation of members.
Written statements must include information about any terms incorporated in their contracts which are subject to collective bargaining with a recognised Union, or the absence of these.
Employers must provide certain facilities in their workplaces to Union Representatives to enable them to meet with and communicate with staff.
Proposal under Employment Rights Bill
The Bill proposes to enhance workplace access for recruitment, organisation of members and collective bargaining purposes.
The Bill will require employers to tell their staff that they have a right to join a Trade Union when they start work (via the s1 statement or contract of employment) and at other ‘prescribed times’ (not yet defined) throughout their employment.
The Bill will require employers to give Union Reps sufficient facility time and create new rights and protections for Trade Union equality reps. This will include a statutory right to take time off during working hours for specified purposes (not defined) related to equality in the workplace.
Current law
The Trade Union Act 2016 made it more difficult for trade unions to take industrial action by imposing higher ballot thresholds for certain important public services, requiring unions to re-ballot members after six months, and restricting picketing. Ballots have to be done via post.
Proposal under Employment Rights Bill
The Bill will introduce electronic balloting for industrial action and repeal most of the Trade Union Act 2016, rolling back almost all of the restrictions on calling strike action introduced by Conservative-led governments since 2010.
For a lawful strike or other industrial action, Trade Unions will need a simple majority of members who respond to an industrial action ballot to vote in favour of industrial action.
Trade Unions will not be required to secure 40% support in strike ballots for six important public services (fire, health, education, transport, border security and nuclear decommissioning sectors).
Whistleblowing
Strengthening protections for whistleblowers
Current law
An employee who makes a disclosure of a breach of the law in accordance with the criteria in the Act is making a “protected disclosure” and is protected as a whistleblower, provided they reasonably believe they are acting in the public interest.
Proposal under Employment Rights Bill
The Bill will explicitly add sexual harassment to the list of relevant failures that form the subject matter of a protected disclosure. This will provide clarity that a disclosure of information by a worker about sexual harassment can be a qualifying disclosure under s.43B of the ERA.
Enforcement
Extension of time limits for bringing tribunal claims
Current law
Most tribunal claims need to be brought within three months of the act complained of.
Proposal under Employment Rights Bill
The Bill has been amended during its progress through parliament to extend time limits for bringing tribunal claims from three to six months. This will apply to all types of claims, including discrimination and unfair dismissal (although curiously it does not currently apply to breach of contract claims – this seems to be an oversight, so may be corrected).
Fair Work Agency
Current law
The UK has limited state enforcement of employment rights.
Proposal under Employment Rights Bill
The Bill gives the government various powers to enforce labour market regulation and to delegate this to a new public authority (expected to be called the Fair Work Agency).
The Fair Work Agency will be able to:
- Enforce failure to comply with the new obligation to keep adequate records of holiday pay.
- Enforce failure to pay certain statutory payments to workers – including holiday pay and statutory sick pay. Based on the existing regime for minimum wage enforcement, the agency will be able to issue a notice of underpayment to employers, which specifies the amount payable within 28 days. This is combined with a penalty of 200% of the sum due, payable to the Secretary of State. This will have major implications for employers who get holiday pay wrong across a workforce.
- Bring Employment Tribunal proceedings on behalf of a worker if the worker has the right to bring a claim, but it appears they are not going to.
- Provide legal assistance for employment-related proceedings, such as helping claimants with holiday pay claims.
- Recover their own enforcement costs from employers who are not complying with the law. This is a major new addition that will increase non-compliance costs for employers and potentially help to fund the agency’s work.
- Enter homes with a warrant to obtain documents and check computers.
Other provisions
Umbrella companies
Current law
Umbrella companies are not currently subject to the conduct regulations, meaning that they generally do not fall within the scope of the Employment Agency Standards Inspectorate.
Proposal under Employment Rights Bill
The bill will allow for the regulation of umbrella companies by the Employment Agency Standards Inspectorate, and subsequently the Fair Work Agency.
From April 2026, new legislation will transfer the responsibility for accounting for PAYE and National Insurance contributions (NICs) for umbrella company workers. This responsibility will fall to the recruitment agency that supplies the worker to the end client or the end client directly, if no agency is involved.
Agencies and end clients that do not outsource payroll must ensure they are prepared to manage this responsibility. Additionally, umbrella companies will be subject to tighter scrutiny and enhanced due diligence obligations under the updated rules.
Tips and gratuities
Current law
It is mandatory for all tips, gratuities and service charges that employers have “control or significant influence” over to be passed on to workers in full.
When paid to an employer’s place of business on “more than an occasional and exceptional basis”, the employer must have a written policy on how it deals with tips.
Proposal under Employment Rights Bill
When developing their tipping policies, the Bill will require employers to consult with employees at the place of business. This consultation should take place with recognised trade union representatives or other elected representatives, but if absent, directly with the workers affected.
Employers will be required to review their policy on tipping at least once every three years, as well as being required to make an anonymised summary of the views expressed during consultation available to all workers at the place of business where the policy applies.
If an employer fails to comply with these measures, the workers will be able to present a complaint to an employment tribunal. A tribunal will be able to award up to £5,000 for financial loss sustained by the worker and attributable to the employer’s failure.
Contact our employment law solicitors today
We will continue to monitor the Employment Rights Bill as it progresses and update you when further specifics are known. If you have any questions regarding any of the issues raised in this article, please do not hesitate to contact our specialist Employment Law team by using our online enquiry form or by calling 0330 191 5713.