Time to start preparing for upcoming Employment Rights Bill

By Laura Morrison, managing practice development lawyer at Dentons

Employment Rights Bill overview

The UK government has introduced the much-anticipated Employment Rights Bill, which promises significant changes for employers. It aims to improve workers’ rights and deliver economic security and growth. The Bill, published within the first 100 days of the new parliament, includes around 28 reforms, of which the following are the most significant:

• Unfair dismissal and probation periods: The Bill will make protection from ‘ordinary’ unfair dismissal a day one right, removing the current two-year qualifying period. The government plans to introduce a statutory probation period, likely lasting nine months. During this period, the ‘day one’ unfair dismissal protection may not apply if the dismissal is due to capability, conduct, legal bar or another substantial reason. The government will consult on a lighter touch process for businesses to follow before dismissing someone during the statutory probation period. It will also consult on what compensation should be available in successful claims. These changes will not come into force any earlier than autumn 2026 to give businesses time to prepare. Consider reviewing your probationary clauses and performance assessment processes now to prepare for these changes.
• Fire and rehire: The Bill will make it automatically unfair to dismiss an employee for not agreeing to a contract variation or to rehire them (or someone else) under a varied contract for substantially the same duties. There will be an exception if the variation is necessary to address financial difficulties threatening the business’s viability and the employer cannot reasonably avoid the variation. This will significantly restrict businesses’ ability to dismiss and re-engage employees to force through contractual changes. Until these provisions come into force, ensure you comply with the existing code of practice on dismissal and re-engagement, which came into force in July 2024.
• Harassment: The Bill reintroduces employer liability for harassment of employees by third parties. This will apply to harassment on the ground of any relevant protected characteristic and not just sexual harassment.
• Sexual harassment: The Bill strengthens the duty on employers to take reasonable steps to prevent workplace sexual harassment, which will become a duty to take all reasonable steps. Ensure you have taken reasonable steps to prevent sexual harassment in the workplace and pay particular attention to assessing the risk of harassment (on the ground of any relevant protected characteristic) by third parties so that you are well placed to defend any claims when the new liability takes effect.
• Zero-hours contracts: Workers on zero-hours contracts will gain rights to a ‘guaranteed hours’ contract that reflects the employee’s normal hours, based on a 12-week reference period, reasonable notice of shift changes and compensation for cancelled shifts. The government will consult on aspects of these new rights.
• Equality action plans: Employers with more than 250 employees will have to publish an equality action plan showing the steps they are taking in relation to gender equality, including addressing the gender pay gap and the steps they are taking to support employees going through the menopause.
• Day one rights: Employees will be eligible for paternity leave and (unpaid) parental leave from the first day of employment.
• Flexible working: Flexible working will become the default from day one, requiring employers to provide reasonable grounds for refusal and a written explanation.
• Maternity and family leave: The Bill paves the way for regulations providing enhanced protection against dismissal during pregnancy and for six months upon return from leave for workers on maternity leave and those returning from other statutory family leave.
• Sick pay: The Bill will remove the lower earnings limit and three-day waiting period for statutory sick pay (SSP). The government will consult on what the percentage weekly rate of SSP should be for those who earn less than the current flat SSP rate.
• Bereavement leave: The Bill extends bereavement leave to all workers, adapting the existing parental bereavement leave regime. The government will set out in secondary legislation the types of relationship to a deceased person that will qualify for bereavement leave.
• Minimum service levels: The Bill proposes repealing legislation that allows minimum service levels during strikes.
• Redundancy: Collective consultation will be required if the number of affected employees meets the threshold (of 20 or more proposed redundancies) across the business rather than treating each workplace separately.
• Trade unions: The Bill introduces several changes, including a simpler majority requirement for industrial action ballots and enhanced rights for union representatives. It also introduces protection from detriment on the grounds of industrial action, a gap in the law that was identified in a recent court case.

Next Steps

Alongside the Bill, the government has published a Next Steps paper detailing planned future reforms. These include:

• launching a Call for Evidence on unpaid internships;
• implementing a right to switch off through a statutory Code of Practice;
• establishing a working group on the use of secure electronic balloting for trade union statutory ballots;
• introducing an Equality (Race and Disability) Bill, which would introduce mandatory ethnicity and disability pay gap reporting for large employers;
• consulting on a single status of worker and a simpler two-part framework for employment status;
• launching a Call for Evidence to examine a variety of issues relating to TUPE regulations and related processes;
• consulting with Acas on enabling employees to raise collective grievances about conduct in their place of work;
• reviewing health and safety guidance and regulations; and
• reviewing the parental leave and carers’ leave systems.

The government has indicated that most of the reforms will not take effect before 2026. Nonetheless, it is not too early to begin auditing policies and contractual terms to accommodate these changes. There will also be plenty of consultations to which to respond, to help shape the detail of many of these new measures. HR teams will have their plates full for the foreseeable future!