The UK Government has today (10 October 2024) introduced its new Employment Rights Bill, reflecting commitments from Labour’s “Plan to Make Work Pay” and the King’s Speech. At 158 pages, the Bill is substantial, and proposes wide-ranging reforms of UK workplace rules.
While the Government pledged to bring in new employment rights and protections within 100 days of assuming office, the Employment Rights Bill has been introduced on the last Parliamentary day before this deadline. Much of the detail will now be developed over the course of the coming months, largely through consultation and secondary legislation.
Employment Rights Bill Proposals
The Bill proposes wide-ranging reforms of UK workplace rules. While the details are to emerge over the coming weeks and months, the following is a summary of the key information we know to date:
Unfair Dismissal and “Day One” Rights
The Bill seeks to eliminate the two-year qualifying period for unfair dismissal, extending protection to all employees from their first day of work. This change will require employers to justify dismissals with a fair reason and follow a lawful process, regardless of service length. A proposed statutory probation period of up to nine months would allow a lighter dismissal process during that time. The government will consult on these reforms, with no changes expected before autumn 2026.
Zero-Hours Contracts and Guaranteed Hours
To address concerns over zero-hours contracts, the Bill requires employers to offer guaranteed hours that reflect previous working patterns. Workers can accept or decline these offers, which must be renewed periodically. This provision aims to reduce reliance on zero-hours contracts, though some exemptions apply for temporary or event-based work. The secondary legislation will determine the reference period and other specifics.
Statutory Sick Pay
The Bill enhances employee rights by removing the existing ‘waiting period’ for statutory sick pay (SSP), allowing claims from day one of absence rather than day 4. The Bill also removes the minimum earnings threshold (the Lower Earnings Limit, currently at least £123 per week). The government is set to consult on what rate of SSP those earning below the lower threshold should receive.
Parental Leave Rights
The Bill eliminates qualifying periods for parental and paternity leave, making these available from day one of employment.
Maternity Protections
Protections for pregnant employees may also be extended, with dismissal protections likely to cover up to six months post-maternity leave, except in specific circumstances.
Bereavement Leave Rights
The Bill converts parental bereavement leave into a general bereavement leave right – effectively expanding this to cover relations beyond children. Two weeks of leave will remain for the loss of a child, while one week will apply to other family members. The leave can be taken separately for each bereavement.
Harassment Protections
The Bill strengthens employer duties to prevent sexual harassment, requiring them to take “all reasonable steps” rather than just “reasonable steps” to stop workplace harassment. This includes preventing harassment by third parties, such as customers or contractors, and could lead to more stringent employer obligations in managing workplace behaviour.
Flexible Working Rights
Building on earlier legislation, the Bill strengthens the right to request flexible working from day one. Employers can refuse requests on reasonable grounds, but they must provide clear justifications. This move aligns with broader efforts to encourage flexible working as a default, supporting work-life balance.
Fire and Rehire
The Bill introduces stricter rules on firing and rehiring practices. It will make dismissals automatically unfair if an employee’s contract is terminated for refusing contract changes or if their role is filled by someone accepting the new terms. Employers may only justify such actions in narrow circumstances, such as when facing significant financial difficulties. This makes it more challenging to impose contractual changes than to dismiss for redundancy.
Collective Redundancies
The Bill expands collective redundancy obligations by removing the “one establishment” requirement. Any redundancy involving 20 or more employees within 90 days, regardless of location, will now trigger consultation and notification requirements. This broadens employers’ obligations and may necessitate restructuring their redundancy processes.
Gender Equality Reporting
The Bill introduces a requirement for employers with 250 or more staff to publish an equality action plan annually. These plans must outline efforts to promote gender equality, address the gender pay gap, and support employees going through menopause.
Trade Union Recognition and Sectoral Bargaining
The Bill reduces thresholds for union recognition and industrial action. Trade unions will need between 2% and 10% of membership in the bargaining unit to apply for recognition, with no longer a requirement to show likely majority support. Recognition ballots will pass with a simple majority of those voting. These changes make it easier for unions to gain formal recognition and reduce the barriers for industrial action.
Fair Work Agency & Enforcement Powers
The Bill proposes the creation of a “Fair Work Agency” to enforce employment rights, including minimum wage and statutory sick pay. This new body will consolidate existing enforcement functions and could become a key resource for both employers and workers to ensure compliance with labour market legislation.
Wider Reforms
In addition to the Bill, a policy paper entitled ‘Next Steps to Make Work Pay’ was also published on 10 October, setting out the Government’s wider strategy for workplace and employment rights. The document makes reference to further changes beyond those featured in the Employment Rights Bill that are expected to addressed through future consultation and legislation.
Not all of Labour’s manifesto pledges are included in the Employment Rights Bill, but the government states it remains committed to advancing additional reforms through other channels, with many likely to longer to implement. These include introducing the Right to Switch Off via a statutory Code of Practice, expanding pay gap reporting to cover ethnicity and disability and reviewing parental and carer’s leave. There will also be consultations on simplifying employment status, potentially moving to a single “worker” status, examining TUPE regulations, and working with Acas to allow collective employee grievance procedures. These reviews suggest that further changes to employment rights may be forthcoming alongside the Bill’s proposals.
Next Steps
The Bill will now progress through Parliament and its provisions may be subject to amendment. As such, the Bill itself unlikely to be enacted until mid-2025, and many of its provisions taking effect from 2026 or later.
Need Assistance?
The Employment Rights Bill is set to precipitate the most extensive reform of UK employment law in recent years. By 2026, we can expect the legal workplace landscape to have undergone substantial reform.
As implementation is expected to follow over the course of the coming 18 months, employers should be proactive in staying informed of developments and preparing for the changes as they come through. Employers should begin assessing their current practices ahead of new obligations and requirements taking effect. Employers should also consider related implications, in areas such as immigration and hiring overseas workers, as we discuss here.
Contact our experts for specialist guidance and advice.
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
