The Employment Rights Bill (the Bill) was introduced to Parliament on 10 October 2024. It is the first phase of delivering the Plan to Make Work Pay – a central part of the government’s mission to grow the economy. The Bill will update and modernise the legislative framework in relation to employment rights.
The detail of the proposed reforms is still being finalised and will be subject to separate consultation. Changes could still be made to many of the provisions announced and, as the government has indicated that it intends to start consultation in 2025, it is unlikely that any of the reforms will come into practice until 2026.
Here we summarise some of the headline reforms announced to date:
- Protection against unfair dismissal from day one, while allowing employers to operate probation periods. The length of the probation period is still to be consulted on, however the government has currently shown a preference for this being 9 months;
- Establish parental and bereavement leave from day one;
- End ‘exploitative’ zero-hour contracts and introduce a new right to a guaranteed-hours contract for those who work regular hours over a 12-week reference period. Workers on zero-hours contracts should also be given ‘reasonable notice’ of changes in shifts or working time, with compensation for shifts cancelled or curtailed at short notice. There remains the option for workers to remain on zero-hours contracts if they wish to do so;
- End unscrupulous practices of fire and rehire and fire and replace. Fire and rehire to be added to the list of reasons constituting an ‘automatic’ unfair dismissal (there are a very limited number of circumstances where this would not apply);
- Make flexible working the default, where practical;
- Stronger dismissal protections for pregnant women and new mothers, this will apply for 6 months after returning to work from a period of family leave;
- Action to address gender equality, including supporting employees through the menopause;
- Strengthen Statutory Sick (SSP) pay, removing the current waiting period and making SSP payable from the first day of absence. The existing Lower Earnings Limit (LEL) for qualifying for SSP, currently £123 per week, will be removed; and
- Establish a new Fair Work Agency with powers to enforce rights such as holiday pay and supporting employers looking for guidance on how to comply with the law.
Some reforms expected to be included in the Bill were absent, including the planned ‘right to switch off’, designed to prevent employers from contacting workers outside of their working hours – this will form part of the ‘Next Steps’ plan, a document that outlines other reforms the government will look to implement in the future.
The Next Steps document makes it clear that unfair dismissal reform will not take effect sooner than Autumn 2026.
We will provide updates as the Employment Bill passes through the parliamentary process – with such substantial reforms, it is likely there will be changes prior to the Bill receiving Royal Assent. It is clear that significant employment rights changes are on the horizon and developments should be monitored to ensure employers are prepared before they become law.