Employment Rights Bill: what do employers need to know?

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The government yesterday introduced the Employment Rights Bill which has been anticipated ever since the election.  The government describes the Bill as “a major milestone towards ensuring our economy works for working people.” However, its provisions, if implemented (as is likely after further consultation and the usual passage through parliament), will impose significantly increased obligations upon employers. It will indeed be the biggest change to employment law and workers’ rights in decades.

Key proposed changes in the Employments Rights Bill

  • Protection against unfair dismissal from Day 1
    Subject to a statutory probationary period of nine months during which unfair dismissal rights will apply but it will be easier to dismiss. This will be a fundamental change removing the current requirement for two years’ service before claims for unfair dismissal can be brought.
  • Statutory Sick Pay from Day 1
    Currently statutory sick pay is only available form the fourth day.
  • Parental Leave from Day 1
    Currently one year of service is required.
  • Paternity Leave from Day 1
    Currently 26 weeks of service is required.
  • Bereavement Leave from Day 1
    This will also be extended to a wider group of persons beyond parents (to be specified in future regulations).
  • Zero hours contracts curtailed
    Employees will have the right to request a permanent contract reflecting their hours over a 12 week period. They will also be entitled to reasonable notice of any hours changes and payment for late cancellation of shifts.
  • Flexible working
    The start position will be that the employee will be entitled to work flexibly. The employer can only refuse if it can show a specified business reason (similar to current position) and be acting reasonably (a new requirement).  A further change is that the employer must explain in writing why their refusal is unreasonable.
  • Increased harassment obligations
    It is proposed that employers assume greater responsibility for sexual harassment and third party harassment of staff.
  • Fire and re-hire
    A much heralded change making it an automatically unfair dismissal of an employee if they refuse a change to their employment terms. The Bill proposes a limited exception to this where there is a genuine need for the changes to avoid serious financial issues threatening the business but there would need to have been extensive consultation.
  • The 20 employee threshold for collective consultation
    To be determined across the business and not just a single site.

When does the Employment Rights Bill become law?

In addition to the Bill, the government has also published supporting guidance Next Steps to Make Work Pay setting out some of the detail of their intended plans.

This also tells us that most of the changes are expected to become law in 2026 and that reforms of unfair dismissal are anticipated to take effect no sooner than autumn 2026.

As an employer, what do I need to do?

The 2026 date will likely be a great relief to many employers who will need time to obtain advice and prepare for these changes.  The changes will fundamentally overhaul the current system of employment law and we need to be ready for that. Given the likelihood that many of these changes will be implemented employers should review their current policies, contracts and practices in readiness for these changes.

There were some omissions from the Bill bearing in mind the wide range of proposed changes previously put forward by Labour, including the proposed single worker status and the statutory right for employees to “switch off” after hours, which would have brought the UK in line with many other countries in Europe. Perhaps these have been left for another day.

Here to Help

The Longmores Employment team can guide employers through the changes in the Employment Rights Bill and help you prepare your contracts, policies and practices ready for 2026.  Get in touch with Richard Gvero or Miranda Mulligan to make a start.

If you would like to learn more about what the Employment Rights Bill means for your business, sign up to our HR Forum: Labour Changes event on 5 November.

Please note the contents of this article are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.