The full details of the Employment Rights Bill, first set out in the King’s Speech given on 17 July 2024, and intended to implement Labour’s Plan to Make Work Pay, was released in October 2024. 

In notes accompanying the bill, the Department for Business and Trade describe the reforms as “landmark”, which will help to deliver “economic security and growth to businesses, workers and communities across the UK.” Implementation of the reforms will be piecemeal with not all changes requiring primary legislation; instead some will use Codes of Practice, or by changes to bodies such as the Low Pay Commission. The upshot is that employers will need to keep their eye on the ball to remain up-to-date.

This confirms that the Workers (Predictable Terms and Conditions) Act 2024 has been abandoned, despite receiving Royal Assent, with the aim of providing security to those on zero hours contracts now wrapped up in the Employment Rights Bill.

Generally consultations are expected to commence in 2025 and come into force some time in 2026, although three consultations have already opened:

Making Work Pay: the application of zero hours contracts measures to agency workers

Making Work Pay: creating a modern framework for industrial relations

Making Work Pay: collective redundancy and fire and rehire

In the meantime, the government has produced guidance documents and a series of fact sheets aiming to help both employees and employers understand the proposed changes. 

Employment Rights Bill overview

Adult Social Care Negotiating Body

Bereavement, Paternity and Unpaid Parental Leave

Fair Work Agency

Fire and rehire

School Support Staff Negotiating Body

Statutory Sick Pay

Trade unions

Unfair dismissal

Zero hours contracts

Summary of main provisions in the Employment Rights Bill

Zero Hours

• Complicated arrangements include a provision for guaranteed hours reflecting hours worked over a ‘reference period’ (with secondary legislation required to set that length), a right to reasonable notice of a shift and payment where shifts are cancelled at short notice
• Where work is genuinely temporary there will be no expectation for permanent contracts to be offered

Flexible Working

• Refusal of flexible working must be reasonable and the employer must not explain why in writing, but the penalty for a breach remains at 8 weeks pay
• Not the wholesale change that was expected where flexible working would be the default position

Dismissal

Unfair Dismissal

• Qualifying period removed (currently two years) so it becomes a ‘day one right’ but not to come into force sooner than 2026, limited to those who have already started work

Dismissal during pregnancy

• Protections strengthened for both pregnant employees, those on maternity leave and after their return to work, expected to be capped at six months

Fire and rehire

• Becomes automatically unfair to dismiss an employee who refuses to vary contract
• Limited exceptions for genuine need, but consultation is required

Collective Redundancy consultation

• Collective redundancy threshold will apply across an entire business rather than at one establishment

Third Party Harassment

• Introduction of full liability - this is building on the legislation on sexual harassment in the workplace that came into force last week which stopped short of imposing a requirement on employers to take “all” reasonable steps to prevent sexual harassment in the workplace.
• Employer liability for harassment by third parties in relation to all relevant protected characteristics is to be added back to the Equality Act, meaning an employer will have to take all reasonable steps to prevent a third party from harassing an employee.

Statutory Sick Pay

• SSP currently payable from the fourth day of sickness which this bill proposes is removed and applies from day one, and the lower earnings limit for eligibility removed, albeit lower earners proposed to qualify for a lower level of SSP.

Leave

Parental Leave

• Will become a ‘day one right’ with current one year qualifying period removed

Parental Leave

• Will become a ‘day one right’ with current requirement to be employed for a period of not less than 26 weeks ending with the week immediately prior to the 14th week before the child’s expected week of childbirth removed

Bereavement Leave

• Wider provisions will apply, to be set out in future secondary legislation

Equality Action Plans

• Employers with more than 250 employees may have to produce action plans to show steps regarding gender equality, and supporting employees through the menopause, and may require more frequent publication than every 12 months

Trade Unions and Industrial Action

• New obligation to give a worker a written statement about the right to join a trade union, must be given at the same time as section 1 statement.
• Where there is a listed trade union the employer must provide access to the workplace by officials of the union for ‘any of the access purposes’ according to the access agreement that will apply between the two
• The Secretary of State will have the power to lower the threshold for compulsory trade union recognition applications.
• Repeal of provisions about minimum service levels
• Existing time off for trade union activities will be extended to incorporate Equality Representatives for recognised trade unions, with a requirement for the employer to provide accommodation and facilities as reasonable in the circumstances.

Government’s Next Steps

Aside from consultations, the government are also committed to implementing the following in due course:

• a ‘right to switch off’ - which will prevent employees from being contacted out of hours, except in exceptional circumstances
• a requirement for large employers to report their ethnicity and disability pay gap
• a move towards a single status of worker and transition towards a simpler two-part framework for employment status
• reviews into the parental leave and carers leave systems to ensure they are delivering for employers, workers and their loved ones.