UK: Government Reforms – Employment Rights Bill

Authors: Corinna Harris and Stephen Miller 

The government’s plans are set out in the Employment Rights Bill, Press release and Statement made on 10 October 2024. They give more detail on rights and workplace protections that have been trailed over recent months.

Changes could still be made to these proposals before many of them come into effect in 2026, with some more immediate changes on the way. Some of the headline plans in the Bill include:

• Unfair dismissal protection from day one: the current two-year qualifying period for unfair dismissal protection will be removed. Employers will be able to use probationary periods to assess the suitability of new hires, with a lighter touch dismissal process during this time.
• Flexible working to be the ‘default where practicable’: there will be greater onus on employers to agree to requests unless flexible working is not ‘reasonably practicable’.
• Strengthened harassment protections: new liability on employers for harassment of their employees on any ground (not just sexual harassment) during the course of their employment by third parties. It will be a defence to show the employer has taken ‘all reasonable steps’ to prevent the third party from doing so.
• End ‘fire and re-hire’ practices: it will be automatically unfair to dismiss an employee:
  • for refusing to agree to a variation to their employment contract
  • to replace them with another person, or re-engage them, under a varied contract to carry out substantially the same duties.
• Collective redundancy consultation: collective consultation will be required, and the duty to notify the Secretary of State on the HR1 form will apply, where an employer plans to dismiss 20 or more employees across the entire business within 90 days or fewer.
• Enhanced rights to statutory sick pay (SSP): all workers will be entitled to SSP from their first day of absence, and the lower earnings limit for SSP will be removed.
• Enhanced parental rights: workers will gain the right to paternity leave, unpaid parental leave and bereavement leave from day one of a job. Strengthened protections for pregnant women and new mothers, and others taking family leave, will also be introduced.
• Zero-hours contracts: the proposal is for workers on zero hours or low guaranteed hours who regularly work more hours than their contracts indicate to have a new right to a contract that reflects the number of hours they regularly work over a 12-week period. Workers will also be entitled to reasonable notice of any changes in shifts, with proportionate compensation for any shifts cancelled or curtailed at short notice. These measures will extend to agency workers.

A range of further measures to come are outlined in the government’s ‘Next Steps’ policy paper.

In addition, the Equality (Race and Disparity) Bill will be published during this parliamentary session (meaning presumably by July 2025). Proposals include:

• Making it mandatory for large employers with more than 250 staff to report their ethnicity and disability pay gaps
• Extending equal pay rights to protect workers suffering discrimination on the basis of race or disability

Key Action Points for Human Resources and In-House Counsel

The government’s plans are significant for employers and employees alike and in many respects go further than anticipated.

It is likely the Bill will not receive Royal Assent for at least another year. The government expects to begin consulting on these reforms in 2025 and anticipates that the majority of reforms will take effect no earlier than 2026. Reforms to unfair dismissal will not take effect before Autumn 2026.

For further details on what is included in the Employment Rights Bill and what practical steps employers can take to prepare, as well as the ‘Next Steps’ reforms, see our update: Workers to get new rights and protections under the Employment Rights Bill.