Employment Rights Bill – What You Need To Know

In October 2024, the government proposed the Employment Rights Bill.

What does the bill cover?

The bill makes amendments to existing employment legislation and creates new legislation which aims to increase productivity and secure economic growth. Most of the changes concern the laws around one-sided flexibility, family friendly rights, equality and the wellbeing of workers, fair pay, trade unions and the enforcement of employment rights.

The bill proposes to make a number of changes including:

New Day One rights

Unfair dismissal

Currently, to bring an Unfair Dismissal, you need to have 2 years continuous service with the employer.

This is unless the dismissal is deemed ‘automatically unfair.’ For example, if the dismissal was because of pregnancy, or as a result of asserting a statutory right. The government propose to make Unfair Dismissal a Day one right but introduce a statutory probationary period. This aims to allows businesses a period of time after hiring an employee to assess whether an individual is in a suitable role.

Unpaid parental leave

Workers will gain immediate access to unpaid parental leave entitlements, offering greater flexibility for family responsibilities from the start of their employment.

Protections for pregnant women, which will extend to 6 months post- partum.

The Bill aims to strengthen protections against dismissal for pregnant women and those returning from a period of statutory family leave. Employees currently have protection related to redundancy dismissals during pregnancy, statutory maternity leave and for a period after the end of maternity leave up to 18 months after the baby’s birth. The proposed regulations may extend the existing redundancy protections to include dismissal for all other reasons.

Paid bereavement leave

Employees facing the loss of a loved one will have immediate access to paid bereavement leave, ensuring compassionate support when needed most.

Paid Paternity Leave

New fathers and partners will no longer need to wait to access their paternity leave rights, supporting better work-life balance from day one.

• Changes to Paternity Leave and Shared Parental Leave

The bill proposes to allow paternity leave to be split into two blocks of one week at any point in the first year after the birth or adoption of their child, as opposed to previously where leave could only be taken in one block.

Under the amended legislation, the notice period required for each period of leave has been shortened to 28 days, or four weeks, instead of 15 weeks before the expected week of childbirth.

In terms of changes to Shared Parental Leave (SPL); employees on SPL will now be protected for 18 months from birth/placement for adoption, provided that the employee has taken a period of at least six continuous weeks of SPL.  If fewer than six consecutive weeks of leave are taken, the employee is protected from redundancy during the period of absence whilst on SPL only. Employees need to be aware that protection granted under SPL will not apply where the employee is otherwise protected under either the maternity or adoption provisions as above.

• Introducing Equality Action plans.

The proposal will require employers with more than 250 employees to create and publish an Equality Action plan. The plan’s sole focus would be to advance the equality of opportunity between male and female employees only. Although there is already a requirement for relevant organisations to publish their gender pay gap, the new obligations will mean that employers will need to address the reasons for gap or put a plan in place to reduce it.

• Ban zero-hour contracts.

The government plan to introduce a new right for a ‘qualifying worker’ (someone who has been employed under one or more zero hours contracts/ arrangements) to be offered guaranteed hours that reflect the number of hours the worker has worked in a defined reference period.

There will also be a new right for workers to be provided with a notice where an employer, in specified circumstances, must make changes to their shift, as well as compensation if a shift is cancelled.

• Put a stop to ‘Fire and Rehire’.

Companies may use ‘Fire and Rehire’ in instances want to change the employee’s terms and conditions. Normally, the company would negotiate with the employee or a trade union representative, but if an agreement is not reached, they may result to simply dismissing the employee and then offering to hire them back under new terms. The bill proposes to ban these practices.

• Modernising Trade Union legislation.

The bill proposes lots of changes to the Trade Union Act 2016. The key changes to be made to the industrial relations framework include: reducing notice periods for industrial action, doubling the expiry period of ballot mandates, introducing e-balloting, protecting against unfair processes and streamlining trade union recognition.

• Changes to Employment Tribunals

Currently, most tribunal claims must be filed within three months of the incident in question. The government plans to extend the time limit to six months for all types of tribunal claims, including Discrimination and Unfair Dismissal. Additionally, the government plans to increase the limit on the amount of compensatory award payable for a successful unfair dismissal claim from £115,115 to £118,223.

• Collective Consultation (Redundancy)

The current law states that in order for the requirement to ‘collectively consult’ in redundancy scenarios to be triggered, the employer must propose to make redundant 20 or more employees within 90 days at one establishment.

The bill originally proposed to remove this requirement, so that redundancies across the entire business would count towards the threshold, but this has been amended. It is now proposed that the ‘at one establishment’ principle will remain, but allows for regulations to be developed setting out a threshold for redundancies proposed at more than one establishment which would then trigger the need to collectively consult.

It has been suggested that the threshold is likely to be based on either a percentage of the workforce or a set number of redundancies.

Anticipated dates for new laws

6^th April 2025: Changes to Statutory Sick Pay entitlement-  Employment Law Update: Changes To SSP Entitlement : Wilson Browne

No earlier than 2026: Most of the reforms will come into effect. Including new laws surrounding dismissal, wages, and worker protections.

No earlier than Autumn 2026: It is expected that Unfair dismissal as a day one right will be introduced. It has become apparent as the bill has passed through the House of Commons that this will; bring with it a statutory probation period.

Changes at first glance

Changes that employers should start to prepare for

The bills timeline means that businesses have plenty of time to assess their current practices and plan to make the changes necessary to remain compliant.

Short term changes:

• Review your pay rates and ensure they are not falling foul of the law. This includes sick pay and when this becomes payable.
• Review your key policies/ procedures, including:

– Redundancy (if you currently have one)

– Flexible working

– Types of Leave, including bereavement, maternity and neonatal.

Longer term changes:

• Read up on the Trade Union reforms – further details will be released later this year.
• Start reviewing and tightening up your current probation periods, as well as offering managers training on how to effectively manage and record performance of staff during their probation.
• If possible, redundancies may transpire in the future, ensure you are familiar of the collective consultation obligations and are familiar of the process to follow.
• Review your key policies/ procedures, including:

– Redundancy (if you currently have one)

– Flexible working

– Types of Leave, including bereavement, maternity and neonatal.

Current bill status

• The Bill has now reached the Committee stage in the House of Lords. This sitting is due to take place on 29^th April 2025.
• It will then need to pass through the report stage and a 3^rd and final reading in the House of Lords before eventually obtaining Royal Assent (this is anticipated to take place around July, but nothing is confirmed as of yet).

Last Updated- 1^st April 2025