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01798 890 021On Thursday 10th October, Labour unveiled their new Employment Rights Bill, making good on their promise to publish their proposals within their first 100 days in government, with just a few days to spare.
If you read our blog post following Labour’s landslide win at this year’s election (which you can read here), you’ll recognise a lot of the proposed changes from Labour’s election manifesto, Making Work Pay: Delivering A New Deal for Working People’.
In Labour’s own words, the Employment Rights Bill marks the biggest upgrade to rights at work for a generation, with the intention of helping to drive economic growth and end unfair employment practices. It will update and modernise the legislative framework in relation to employment rights.
At Metro HR, we pride ourselves on doing the hard work for you – and so we’ve been very busy reviewing all 158 pages of the Employment Rights Bill, as well as the supporting document, ‘Next Steps to Make Work Pay’.
Suffice to say, there’s quite a bit to take in, with some pretty big changes in the works, as well as some smaller updates. So forgive us, but this is a longer read this month! Oh, and before you start, just bear in mind there there are no confirmed effective dates for most of these things yet, and it is estimated they won’t become effective until 2026, so we to be aware but will need to keep an eye on this for a while yet.
We’re committed to supporting our clients to stay on top of changing legislation, and in this blog post, we’re laying out the key updates to be aware of, along with what that means for you and your business / organisation.
One of the most significant changes proposed in the Employment Rights Bill is the removal of the current two-year qualifying period for protection against unfair dismissal. This means that all employees will be entitled to protection from day one, ensuring that workers have immediate rights without the need to wait for two years.
A key consideration for businesses here is around the use of a proposed statutory probationary period (likely to be set at 9 months). It is expected that regulations will also be brought in around the use of probationary periods, with a lighter touch process to follow during this time to dismiss any worker. The government has emphasised that fair dismissal will not be prevented – but what the change in legislation highlights for businesses is the importance of a well-thought out process, along with clear and documented communication. Not expected to be effective until Autumn 2026.
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According to the Big Issue, a million people in the UK are on zero-hours contracts. Labour have spoken for some time about the negative impact of ‘zero-hours’ contracts, which often results in fluctuating income and low job security for the employee. The new bill seeks to address issues of ‘one-sided flexibility’ by banning ‘exploitative’ zero-hours contracts. It remains to be seen exactly what was meant by ‘exploitative’ – and what the new bill lays out.
Workers on zero-hours or ‘low-hours’ contracts who regularly work more hours than stated in their contracts will have the right to switch to a guaranteed hours contract that better reflects their actual work patterns, reflecting the hours they work over a set reference period. It will also require workers to be compensated for any changes or cancellations in shifts that are made without reasonable notice. We were this month expecting the ‘Right To Request A Predictable Working Pattern’ legislation to take effect, but this was shelved. It seems this is being pushed in to the changes to zero-hours contracts. No confirmed date for implementation.
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In a similar vein as ‘zero-hours contracts’, Labour are keen to end the controversial practice of ‘fire and rehire’, where companies dismiss employees only to then offer them the same job on invariably less favourable terms. This creates further instability, poor working conditions and lack of confidence for staff, as well as having wider implications across the job market as a whole. The new legislation will close loopholes that allow this practice, ensuring that firms can only restructure when genuinely necessary and that fair, transparent processes are followed. Getting this wrong could result in an automatic unfair dismissal being determined. Again, no confirmed date for implementation.
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A major focus of the bill is to support a better work-life balance for everyone, and to improve working parents’ rights.
Flexible working will become the default, allowing more employees to adjust their schedules to better suit personal commitments. The proposed changes haven’t quite been as strong as expected and don’t really change the already strengthened legislation from April 2024, with no change to the penalty for breach (which remains at 8 weeks pay) – however, the legislation has been strengthened to state that refusal of flexible working requests must be ‘reasonable’ and employers must demonstrate in a refusal (still using one of the same 8 business reasons to refuse a request) why their refusal is considered ‘reasonable in the circumstances’.
Additionally, the bill introduces a day-one right to bereavement leave of at least one week for employees, and ensures paternity and unpaid parental leave are available from day one also. Pregnant women and new mothers returning to work will also see strengthened protections, helping them navigate work and family responsibilities more easily and give them better dismissal rights during their pregnancy and beyond.
The ‘right to switch off’, ensuring employees receive effective rest periods out of work, which was heavily mentioned in Labour’s proposals does not yet appear in the bill – however, it is mentioned in their Next Steps document, which you can read here. It is expected a ‘Right to Disconnect’ code will be drafted.
No confirmed dates for implementation on any of these points as yet.
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There are two key changes coming to Statutory Sick Pay (SSP), in order to provide a stronger safety net for employees. These are removing the lower earnings limit which sits currently at an average of £123.00 per week and currently prevents lower-paid workers (earning less than the threshold) from qualifying for SSP, and cutting out the three day waiting period before sick pay begins. This means SSP will be made available from the first day of sickness and the first day of employment. This ensures that all workers, regardless of income level, can access financial support when they are unwell. No confirmed date for implementation.
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The Employment Rights Bill includes measures to increase protection from sexual harassment in the workplace, mainly around full liability for third party harassment – i.e. harassment from customers, contractors or other third parties. It will also increase the duty for all employers to take ‘all reasonable steps’ to prevent harassment in the workplace and goes a step further than the legislation change effective 26th October 2024 which requires employers to take ‘reasonable steps’ to prevent harassment in the workplace. Further regulations may be introduced to further specify exactly what steps are considered to be reasonable to help employers navigate this. No confirmed dates for ‘all reasonable steps’ to be effective.
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Currently, collective consultation obligations are triggered where there are 20 or more proposed redundancies at one establishment within a 90-day period. The bill will remove the words ‘at one establishment’, aiming to improve the process around collective redundancies. Employers will be held accountable for unfair dismissal practices and are required to consult with employees properly during restructuring. Additionally, interim relief measures will be explored to protect workers during these situations. No confirmed effective date.
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A significant part of Labour’s Plan to Make Work Pay was around the closing of gender, disability and ethnicity pay gaps.
The government has pledged to make workplaces more inclusive by implementing a range of measures to ensure equal pay and address pay gaps. The bill requires larger organisations (specifically, those with over 250 employees) to produce action plans on addressing gender, ethnicity, and disability pay gaps, ensuring that workplaces are safer and more inclusive for all employees. They will also be expected to produce action plans on how they will support staff through the menopause.
Employers will also be required to ensure that outsourcing cannot be used as a means to circumvent equal pay laws, reinforcing the commitment to fair treatment for all workers.
Strengthened rights for pregnant workers also form part of this broader push for equality and safety. There will be new rules protecting new mothers, which will ban employees returning from maternity leave from being dismissed within six months, except only in specific circumstances.
No confirmed effective dates just yet.
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Lastly, there are some key changes coming to provide trade unions with new rights, for the first time in over a decade.
The bill brings forward reforms to modernise trade union laws, emphasising good faith negotiation and dispute resolution. It will repeal some of the restrictive Conservative legislation, including the Strikes (Minimum Service Levels) Act 2023, and remove the ban on agency workers covering duties during strikes. The government will also consult on measures to strengthen union representation and simplify the process for union recognition, ensuring that workers have a stronger collective voice in the workplace. Employers will have a duty placed on them to inform their workers of their right to join a trade union.
The new regulations will grant trade unions regulated access to workplaces, meaning that they will now be more easily able to recruit and organise themselves. No confirmed dates for implementation.
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The Employment Rights Bill marks a significant step forward in protecting workers’ rights and ensuring fair treatment across all sectors, whilst also aiming to boost economic growth.
There’s a lot to take in here, and some updates will inevitably have a bigger impact than others. As consultations and amendments continue, businesses and employees alike should stay informed to understand how these changes might impact them, but stay calm and measured as nothing is confirmed as yet.
There are a number of measures that don’t appear in the bill that are likely to be addressed in other ways, in the longer term. A separate Equality (Race and Disability) Bill is expected in the autumn, covering various rules to bring in greater equality in the workplace. A review of parental leave and carer’s leave provisions are also expected, along with a call for evidence on TUPE (Transfer of Undertakings – Protection of Employment) reform.
The Employment Rights Bill will now undergo the standard parliamentary process, with the government aiming to continue to consult stakeholders throughout 2025, with most reforms expected to take effect from 2026. Whilst it’s likely that some of the proposals will look different by the end of this process, for now, it’s wise for businesses to be aware of the upcoming changes, and think ahead about how they might adapt when the new rules are implemented.
At Metro HR, our priority is to keep on top of legislative changes and support our clients and their businesses through these transitions, so that they can continue to thrive. We’ll be monitoring the development of the Employment Rights Bill as it moves through parliament and will keep you updated as things develop.
To explore further how we can support your business at this time, and talk through what measures you need in place to be fully prepared, why not book a call with us to explore what might be possible.
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