The UK employment landscape is set for major transformation following the introduction of the Employment Rights Bill (the Bill) by the Labour government (the Government) on 10 October 2024. If passed, this landmark legislation will significantly strengthen worker protections and reshape workplace dynamics.
In this blog, we explore the key features of the Bill, its potential impacts and what both employees and employers need to know.
A new era for employment rights
The Bill underscores the Government’s commitment to the vision outlined in its Employment Rights Green Paper, aimed at improving employment rights in the UK. The Labour Party had pledged to introduce an employment bill within the first 100 days of taking office if they won the 2024 election – a promise they have delivered on.
The Bill is currently awaiting the Report Stage in the House of Commons, followed by its third reading. Afterward, it will move to the House of Lords for consideration before receiving Royal Assent. While the exact timeline remains uncertain, the Government’s proposals have already drawn significant attention.
This landmark legislation seeks to address long-standing concerns around pay, job security, inequality, discrimination and employee well-being. Regarded as a ‘game changer’ in employment law, we will explore some of its most significant changes below.
Key provisions of the Employment Rights Bill
This Bill outlines 28 employment law reforms aimed at addressing key issues in the sector. These provisions cover a wide range of areas, from improving transparency in employment terms to enhancing workers’ rights in relation to pay and termination processes. The reforms include:
Protection from unfair dismissal
Unfair dismissal occurs when an employer terminates an employee’s contract without a fair reason or without following proper legal procedures. Employees in the UK are protected against unfair dismissal under the Employment Rights Act 1996, provided they meet certain eligibility criteria.
You can read our guide to unfair dismissal to learn more.
Currently, to be entitled to claim unfair dismissal, an employee must have at least 2 years of continuous employment with their employer. This practically means that employers can dismiss employees within the first 2 years of employment without having to follow any specific procedures. Of course, this does not apply to cases of ‘automatically unfair’ dismissal, such as those related to pregnancy, making a flexible working request or ‘compulsory retirement’ (being forced to retire). Employees do not need 2 years of employment to claim dismissal for any of these reasons.
The Bill proposes reducing the current 2 year threshold for unfair dismissal claims, granting employees greater job security and protection from unfair dismissal from day one of employment. This change would therefore make it easier for employees to challenge early terminations.
However, the Government acknowledges the need for flexibility during the early stages of employment. Currently, probationary periods are not legally required but are commonly included in employment contracts to allow employers to assess whether a new employee is suitable for the role. Recognising this, the Bill proposes introducing a ‘statutory probationary period’ of nine months, during which a less onerous process for dismissing an employee fairly will apply.
The exact length of this probationary period and the specific procedures for dismissal during this time will be subject to further consultation. This approach aims to balance job security for employees with employers’ ability to manage performance and suitability in the early stages of employment.
Strengthened Statutory Sick Pay
Statutory Sick Pay (SSP) is the minimum statutory pay that employers are required to provide to eligible employees who are unable to work due to illness. It offers financial support during short-term sickness. Currently, SSP is £116.75 per week, with an increase to £118.75 in April 2025, and can be paid for up to 28 weeks.
At present, employers must pay SSP to employees who meet certain eligibility criteria. The first criterion is that the employee must earn an average of more than £123 per week (the lower earnings limit). The second requirement is the ‘waiting period’ of 3 days, meaning that employees are not eligible for SSP during the first 3 days of their illness (the days they would have worked). They become eligible for SSP on the fourth day of sickness.
However, this is set to change. Through the Bill, the Government wants to strengthen SSP by removing the waiting days as well as extending eligibility to those who earn below the lower earnings limit. For these lower earners, SSP would be calculated as a percentage of their earnings, with the exact percentage to be determined based on the outcome of the consultation.
Zero hours contracts: right to guaranteed hours
‘Zero hours contracts’ are casual agreements between an employer and a worker, where the employer does not guarantee any specific working hours. When work becomes available, the employer offers it to the individual, who can choose whether or not to accept the offer. The worker can have zero hours contracts with multiple employers and cannot be restricted by any single employer from doing so. These contracts are typically used in situations with irregular demand for staff, such as retail work during the holiday season or at events like weddings.
While on the outside, zero hours contracts offer flexibility to both parties, they tend to be more advantageous to employers as they provide greater control over staffing costs and obligations. For workers, the flexibility is offset by a lack of stability and security, as employers have control over when to offer work and workers are not paid when there is no work available.
The Bill proposes a change by requiring employers to offer qualifying workers (zero hours workers and ‘low hours’ workers) guaranteed hours based on the hours worked during a ‘reference period’ (the Government suggests this to be 12 weeks). Workers would have the option to reject such offer of guaranteed hours and remain on their current contract if they choose.
Additionally, the Bill proposes giving workers the right to reasonable notice of shifts, any changes to those shifts and payment for shifts that are cancelled at short notice. The Government plans to consult on these changes in the near future.
Flexible working from day one
Flexible working is a work arrangement designed to meet an employee’s needs, such as adjusting start and finish times or working remotely. Employees can request changes to their working hours, start and finish times, working days or place of work.
Prior to April 2024, employees had to be continuously employed for at least 26 weeks before they could make a request for flexible working. However, from April 2024, the Flexible Working (Amendment) Regulations 2023 came into force, granting employees the right to request flexible working from day one of their employment. Employers must respond to these requests within 2 months and consult with the employee before refusing the request. Employers can refuse requests based on 8 business grounds, such as a detrimental effect on meeting customer demand, quality or performance or an inability to reorganise work among other staff.
The Bill now aims to make it harder for employers to refuse flexible working requests. It specifies that employers can only refuse a request if it is reasonable to do so under the circumstances. While the grounds for refusal remain the same, employers will now be required to explain why they believe it is reasonable to refuse a request based on those grounds.
Proactive duty of employers to prevent sexual harassment
In October last year, the Workers Protection (Amendment of Equality Act 2010) Act 2023 introduced a preventative duty for employers to take ‘reasonable steps’ to protect their workers from sexual harassment. The Bill now proposes expanding this duty to require employers to take ‘ALL reasonable steps’ to prevent sexual harassment. This change would likely place additional burden on employers in the UK.
The Bill suggests that regulations may be introduced to define what steps would be considered ‘reasonable’, helping to determine whether an employer has taken ‘all reasonable steps’ to prevent sexual harassment.
Conclusion
If the Bill becomes law, further details on many policies will be provided through regulations, with consultations on most reforms expected to begin in 2025.
Most of the reforms in the Bill are anticipated to take effect no earlier than 2026, with the unfair dismissal changes expected to come into force no sooner than autumn 2026. The Government also plans to publish guidance where appropriate.
For more information on these developments or employment law more generally, please contact our employment solicitors Marc Jones, Imogen Finnegan or Rhodri Thomas or reach out to us here.
