The Employment Rights Bill was published by the Government in October 2024 and recent amendments were made in March this year. It is expected that most of the reforms are likely to take effect from 2026. Read on to find out more about the Bill and how it may impact your business. 

• Unfair dismissal rights: the introduction of a day one right for employees to challenge unfair dismissal without the need for a qualifying period. The Bill proposes an ‘initial period of employment’, a type of probationary period, where dismissal for conduct or capability would be subject to a lighter process, possibly between three and nine months.
• Changes to access to Statutory Sick Pay (SSP) by removing the waiting period and the Lower Earnings Limit: SSP will now be a day one right for all workers (rather than from day four of illness, as is currently the case) and there will no longer be a requirement for an employee to earn more than the Lower Earnings Limit to be eligible for SSP.
• Dismissal for failing to agree to variation of contract (Fire and Rehire): this would make it automatically unfair to dismiss employees who refuse contract changes with a view to immediately re-engaging them on modified terms. There is a very limited exception if the employer can show that they were acting in response to financial difficulties affecting their ability to carry on business as a going concern. It is also proposed to double the maximum protective award for failure to consult from 90 to 180 days’ gross pay per affected employee.
• Changes to collective redundancy consultation: the Bill proposes that collective consultation will be required if there are either 20+ redundancies at one establishment or if another threshold test (to be confirmed) is met which will involve counting employees across all sites/workplaces. The Bill would also increase the maximum protective award from 90 days to 180 days’ gross pay. 
• The right to guaranteed hours (zero hour contracts): employers will be required to offer a guaranteed number of hours and working pattern, and compensation for short notice changes and cancellations.  It looks likely that these measures will also apply to agency workers.
• Protection for people returning from maternity leave: at present, in redundancy situations, women have the right to be offered suitable alternative employment (if available) once they inform their employer of their pregnancy or if their expected date of childbirth was less than 18 months ago. 
• Paternity leave: the Bill removes any length of service requirement to be eligible for paternity leave.
• Parental leave: the Bill removes any length of service requirement to be eligible for parental leave. 
• Bereavement leave: the Bill will give the power to introduce a day one right to at least one week of bereavement leave for employees. Regulations will specify the necessary relationship (so likely not only for parents).
• Flexible working: at present, employees have a right to request flexible working from day one. Employers can refuse based on one or more of the eight business reasons listed in legislation. The penalty for breaching the statutory flexible working regime is eight weeks’ pay, currently capped at £5,600. The Bill adds an additional layer of obligation on employers; any refusal of a request must be reasonable, but the business reasons and penalty remain the same i.e. it must be objectively reasonable for the employer to have relied upon the chosen business reason(s).
• Records of statutory holiday entitlement and pay: there is a new obligation to keep records to demonstrate compliance with statutory holiday entitlement and pay. These records must be kept for up to six years and failure to comply will be a criminal offence and liable to fines.
• Stronger duty to prevent sexual harassment and whistleblowing: since October 2024, employers have been obliged to take reasonable steps to prevent the sexual harassment of employees and workers. It is proposed that this duty be strengthened to all reasonable steps. The Government will set out what this duty amounts to in the legislation.
• Harassment (not just sexual harassment): the Bill proposes to make employers liable for all types of third-party harassment unless they took all reasonable steps to prevent this.
• Equality action plans including gender pay gap and menopause action plans: employers with 250+ employees will be required to produce and publish action plans on equality and these will include action plans to address the gender pay gap and employees coping with symptoms of the menopause. The gender pay gap reports will be required to identify contract workers. There will be penalties for non-compliance. Separate legislation may introduce mandatory ethnicity and disability pay gap reporting for employers with 250+ employees.
• Establish the Fair Work Agency: this agency will bring together existing state enforcement functions and in time take on enforcement of a wider range of employment rights. This is a change towards more state enforcement of employment rights, although it is unclear when this will happen and what powers the agency will ultimately have.
• Access to and recognition of trade unions: there are various proposed changes to improve rights to trade union access in the workplace and to simplify the trade union recognition process.
• Period to make an employment tribunal claim: at the moment, this normally needs to be brought within three months of the act complained about. The Bill proposes that this time period is extended to six months.

What is NOT covered by the proposed legislation (at the moment): 

• The right to switch off, giving employees a right not to review communications outside working hours;
• There is no inclusion of legislation prohibiting unpaid internship; and
• There are no proposals regarding changes to the three-tier system for employment status: so the distinction between self-employed, workers or employees will remain the same.

What you should consider doing:

• Review your recruitment procedures: to give you the best chance of recruiting the right candidates, employment contracts for new joiners may need to be amended for new probation periods during which performance should be carefully monitored and managed. 
• Flexible working requests: although there is no major change proposed to requests for flexible working, you should prepare for more flexible working applications and to demonstrate that your approach to the applications is reasonable.
• Take steps to prevent harassment: take steps to comply with the existing duty to prevent sexual harassment and prepare for the significant increase in obligation that will come with having to take “all” reasonable steps to do so (including harassment by third-parties) such as risk assessments, regular and mandatory training, and appointing workplace champions.
• Collective consultation: you should prepare for changes to collective redundancy consultation and potentially, for some employees, the unionisation of employees.
• The flexibility you have to change terms and conditions: these may need to be changed for various reasons including financial, operational, legal and regulatory. It will be very difficult to make these changes without employee consent. You should consider how to avoid a situation where contractual changes are needed but employee consent will not be achieved. 
• Engagement of casual workers: although many of the relevant proposals are still to be fleshed out, employers who use zero hour or low hour contracts, should prepare to make significant changes to their approach to these workers (potentially agency workers will be included under this legislation).
• Finally, remember to update your policies to include neonatal care leave and pay: The Neonatal Care (Leave and Pay) Act 2023 grants parents the right to 12 weeks’ leave and pay if their baby requires neonatal care, in addition to existing parental leave entitlements. 

What is next for the legislation: the bill is progressing through the legislative and consultation processes.  It is not known exactly when it will receive Royal Assent (likely July 2025).  The Government has said that they expect that most of the reforms will take effect no earlier than 2026, and where more time is needed for businesses to prepare, this will be taken into account.

This update is intended to give a general summary of the law and should not replace specific legal advice for your circumstances. Please contact david@londonlawcollective.com, if you have any questions.