As part of its manifesto, Labour pledged to implement major reforms to employment law under its ‘Make Work Pay’ strategy. On 10th October, the Employment Rights Bill was introduced. The 158 page document presents 28 individual reforms to help deliver economic security and growth to businesses, workers and communities across the UK. It represents the biggest overhaul of employment law changes in a generation. We look at some of the stand-out reforms, their implications for employers and the actions to take now.
Key timings
The Bill is expected to become law by summer 2025, however, consultations on some measures will continue into autumn 2026. The Government has produced a series of fact sheets which explain the background to the Employment Rights Bill.
Day-one right to unfair dismissal protection
Currently, employees need two years of service to qualify for unfair dismissal protection. The Bill introduces a new rule that grants workers this protection from their very first day of employment. The Government has said, “The government is committed to consulting on implementation of unfair dismissal reforms. Several aspects of implementation will be consulted on, including the length of the statutory probation period, and how the ‘lighter touch’ dismissal process will operate. We will also consult on the unfair dismissal compensatory award regime for dismissals during that period. Reforms of unfair dismissal will take effect no sooner than autumn 2026.”
This change will significantly increase the risk of employment tribunal claims for businesses, making it crucial to review recruitment, onboarding, and probation processes. Policies related to disciplinary actions, employment contracts, and staff management will also need to be updated.
Actions:
- Review your recruitment, onboarding, and probationary processes.
- Update disciplinary policy, employment contracts and employee handbooks.
- Staff management procedures and training.
- Reporting and tracking systems (such as HR software).
Consultation on statutory probation period
The Government plans to consult on the introduction of a new statutory probation period for new hires. This period is likely to last up to nine months and will give employers more flexibility to terminate employees during this time. It is expected no earlier than autumn 2026.
It says, “The government recognises the importance of ensuring that a job is a good fit for both the employee and the employer through the establishment of a ‘statutory probationary period’. This will ensure businesses retain the confidence to hire employees.”
Day-one rights for paternity, parental, and bereavement leave
Under the new rules, the current 26-week service requirement for paternity and parental leave will be removed, allowing employees to access these rights from day one. This is expected to benefit 30,000 fathers or partners and 1.5 million parents. The policy intends to bring parental and unpaid parental leave into alignment with other parental leave entitlements (including maternity and adoption leave).
Additionally, employees will be entitled to paid bereavement leave for close relatives, although the specifics are still to be defined. Currently there is no statutory right for employees to take bereavement leave following a death (except for parents who lose a child aged under 18). Most employers typically respond compassionately and grant time off during these circumstances. However, without legislation there are situations where employees may not be given the adequate time off needed to grieve. The Government guidelines state, ” It will provide a clear baseline for employers and protect those employees who might not have otherwise received time off from their employer.”
There are implications for employers to think about, including dealing with short notice requests or managing multiple requests from workers. This could have an impact on business services with short notice leave. Employers will also need to think about fairness and consistency when authorising requests.
Employers will need to adjust leave policies and inform employees about their entitlements. Potentially, they may need a greater HR resource to advise managers on requests.
Review:
- Maternity and paternity leave policies.
- Parental & shared parental leave policies.
- Adoption leave policy.
- Flexible working policy.
- Employee handbooks.
- Management procedures.
- Staff training on managing short notice requests.
- HR systems.
Stronger protections for pregnant employees and new mothers
The Bill will strengthen protection for employees during pregnancy, maternity leave, and up to six months after their return to work. These reforms are intended to safeguard new mothers from unfair dismissal and other discriminatory practices.
Review:
- Maternity and paternity leave policies.
- Parental & shared parental leave policies.
- Adoption leave policy.
- Flexible working policy.
- Employee handbooks.
Statutory Sick Pay (SSP) reforms
The Bill introduces two major changes to statutory sick pay:
- The removal of the lower earnings limit, making more workers eligible for SSP.
- The elimination of the current three-day waiting period, allowing SSP to be paid from the first day of absence.
Currently, an employee must have average weekly earnings at or above the Lower Earnings Limit (£123 per week to be eligible for SSP. Of those who are eligible, they are paid from their fourth day of sickness.
The Government aims to ensure that 1.3 million low-paid employees will now be eligible for SSP, “Together these changes will support all employees to take the time off they need to
recover by providing better financial security. This can also help prevent the spread of infectious diseases in the workplace, reduce the overall rate of sickness absence and deliver productivity
benefits for businesses and the economy.”
These changes may lead to higher costs and more employees taking time off, especially in sectors with a large number of lower-paid or part-time workers. Incorrect pay could result in tribunal claims and have an impact on probation assessments if employees are sick during the probationary period.
Consider the financial impact on your sick pay policies, especially for lower-paid and casual workers.
Review:
- Sickness and absence management policy.
- Plan and budget for potential additional costs and admin time.
- Employee handbook.
- Return to work policy.
- Management procedures and staff training.
- Reporting & tracking systems (such as HR software).
Flexible working from day one
The right to request flexible working will be available from the first day of employment, unless the employer can provide a justifiable reason why it is not feasible. Employers may face increased risks of tribunal claims if they are unable to demonstrate reasonable grounds for refusing flexible working requests. They will also need to consider the impact it may have on customer service and will need to be more transparent during recruitment process.
Consider how flexibility can be extended proactively within the business.
Review:
- Flexible working policy.
- Hybrid working policy.
- Recruitment policy (job adverts should state what level of flexibility you can offer).
- Employee handbook.
- HR systems and tracking systems.
- Homeworking risk assessment.
Restrictions on zero-hours contracts
The Bill will end “one-sided” flexibility in zero-hours contracts, requiring employers to provide a contract that reflects an employee’s regular working hours. Workers will also receive reasonable notice of shifts and compensation for cancelled shifts. Employers will need to think about creating schedules in advance, and there will potentially be less flexibility in managing staff costs. However, this is not a blanket ban, zero hours will still be permitted if employees want them.
Ensure your contracts reflect actual working patterns and give reasonable notice of shift changes.
- Consult with workers on zero-hours contracts to understand their preferences.
- Consider offering fixed term contracts to current zero-hours workers.
Review:
- All employee contract types.
- Amend existing contracts.
- Manage working patterns.
- Recruitment implications.
Fire and re-hire restrictions
A new statutory Code of Practice on fire and rehire/dismissal and re-engagement came into force on 18 July 2024. The Bill introduces new restrictions on fire-and-rehire practices, making it automatically unfair to dismiss employees for refusing changes to their contracts unless the changes are essential for business viability.
The guidance states, “It is important that businesses can restructure to remain viable, to preserve their workforce and the company when there is genuinely no alternative, but this must
follow a proper process based on dialogue and common understanding between employers and employees. Ending unscrupulous fire and rehire tactics means employees can be safe in the
knowledge that terms and conditions negotiated in good faith can’t be ripped up under threat of dismissal. Employees will be able to plan and save for the future with security in their pay and
terms. Good employers will also know that they will not be undercut by competitors who only engage staff under threat of the sack.”
Greater thought and planning will be needed before undertaking a fire and re-hire process.
Review:
- Termination policy & consultation procedures.
- Employment contracts.
Protection from harassment
The Bill will place a stronger duty on employers to prevent sexual harassment, including third-party harassment. Employers will need to demonstrate that they have taken all reasonable steps to prevent harassment in the workplace. This is effective from 26th October 2024. Read our guide.
- Develop an effective anti-harassment policy.
- Engage staff.
- Conduct a risk assessment.
- Establish robust process.
- Train staff.
- Analyse the risk of third-party involvement.
Missing from the legislation
Some of the commitments will be delivered outside of legislation including the ‘right to switch off’ to prevent employers contacting staff outside of their working hours. This is subject to consultation and likely to be introduced as part of a voluntary code of conduct, rather than a workers’ right. Businesses will likely sign up for it, and it’s up to them to discuss boundaries with their team and what works for them.
Key takeaways for employers
- Significant changes to unfair dismissal protections and statutory leave rights.
- Stricter rules on zero-hours contracts and fire-and-rehire practices.
- Enhanced protections for new mothers, workers on sick leave, and those requesting flexible working.
- Stronger obligations to prevent harassment in the workplace.
The Employment Rights Bill 2024 is set to transform the employment landscape, with widespread implications for employers across the UK. While the timeline for implementation is still uncertain, businesses must start preparing now to navigate these changes successfully.
If you have any questions about how the Employment Rights Bill will affect your business or would like assistance reviewing your policies, get in touch with us. Alternatively, complete our HR Healthcheck to see how your HR fares.