The government’s Employment Rights Bill has finally been announced, giving employers a clearer view of what they can expect.

Although many details still need to be confirmed and the bill remains subject to change, we now know that most of the reforms will be consulted on before being introduced next summer 2025 or, in some cases, autumn 2026.  Some reforms will also require further law.

There are a number of significant proposals that will impact business.

Key Points

• The right to flexible working is to become the default where ‘practical’, unless the employer can prove it is unreasonable. 

• The right to claim unfair dismissal from day one, instead of the current 2-year qualifying period. The government will consult on a new statutory probation period for “new hires”. Government preference is for a 9-month probationary period and has confirmed that this reform will not be before autumn 2026.

• Zero-hours workers who qualify will have a right to a guaranteed hours contract at the end of every reference period (still to be defined.) The contract must specify either the days of the week and the hours or working pattern that will be offered, and either must reflect the reference period hours in the relevant period.

Employers using zero hours contracts must also give employees reasonable notice of shifts and cancellation of shifts.

Failing to comply to these changes would allow employees to be able to bring a Tribunal claim.

• Fire and Rehire: a new category of automatic unfair dismissal will be introduced where the employer seeks to vary the employee’s contract of employment and the employee refuses to agree.

This also applies if the principle reason for dismissal is to enable the employer to recruit another person, or rehire the employee, under new terms but with substantially the same duties.

The Bill provides a narrow, last resort exception where a business can show it needs to be able to “restructure to remain viable.”

• Statutory Sick Pay will be strengthened: the qualifying earnings limit has been removed and employees will now be entitled from the first day of absence.

• Day One rights will be available for parental, paternity and bereavement leave. More people will become eligible for statutory bereavement leave.

• Minimum Wage age bands will be removed, and the cost of living will be accounted for when setting the minimum wage.

• Pregnant women and new mothers returning to work will be protected from dismissal whilst pregnant, on maternity leave, and within six months of returning to work.

• Sexual Harassment: our recent HR Newsroom article outlined new legal duties for employers to take reasonable steps to prevent sexual harassment in the workplace, coming into force on 26 October 2024.

This is extended by the Bill to create a higher bar of duty, so that employers must now take “all reasonable steps” to prevent sexual harassment. 

• Harassment by Third Parties: the Bill also includes a duty for employers to prevent harassment of employees by third party - for example by customers, clients, and the general public. This is in respect of all protected characteristics (not just sex.)

• A new Fair Work Agency is to be created, bringing together existing enforcement bodies. This gives new powers to enforce statutory rights such as holiday pay. It will also provide support for employers on complying with the law.

• Trade Unions/Industrial Action: this includes repealing previous government trade union legislation, giving increased rights of access making it easier to recruit and organise workers, and enabling collective bargaining.

Alongside the legislation, a ‘Next Steps’ document has also been published. This outlines reforms that the government is looking to consult on and implement in the future. These include:

• Right to Switch Off - preventing employees from being contacted out of hours, except in exceptional circumstances.
• Requirement for large employers to report ethnicity and disability pay gaps.
• Move towards a single status of worker.
• Reviews into statutory parental and carers’ leave.

We’re Here to Help

With a Bill that is 158 pages long and contains 28 reforms to workers’ rights, there is much for SMEs to make sense of.

Although not all reforms will be material to the daily practices of individual businesses, every employer will need to be properly prepared. This may require custom guidance and advice.

To help employers avoid the pitfalls, WorkSmarter can arrange in-house, bespoke training and support from expert employment specialists.

Get in touch today.