Employment Rights Bill

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First published 23 January 2025

Last updated 28 March 2025

Unfair dismissal:

• Day one unfair dismissal rights
  One of the key changes proposed by the Bill is the removal of the current two-year qualification period for unfair dismissal claims. This means that, once the Bill is passed and comes into force, employees will no longer have to accrue two years' employment before bringing a claim.
  
  
• ""Initial period of employment""
  Alongside the day-one unfair dismissal rights, the Bill also introduces a statutory ""Initial Period of Employment"" (IPE). The length of the IPE is yet to be confirmed: the government has indicated a preference for 9 months but this will be subject to consultation.
  
  During the IPE, employers may be able to dismiss employees using a ""light touch"" procedure, which could involve a meeting where concerns are explained, and the employee has the right to be accompanied. However, the exact requirements and interplay with the Acas Code of Practice are still to be defined in the forthcoming regulations.
  
  Crucially, the lighter process during the IPE will not be available for all dismissals. It is expected to apply only where the principal reason for dismissal relates to the employee’s capability, conduct, illegality, or another substantial reason directly connected to the employee (not including redundancy or restructuring under SOSR).
  
  
• Cap on compensatory awards
  Through a government-backed amendment to the Bill, the Secretary of State will have the power to impose a cap on compensatory awards for employees unfairly dismissed during the IPE.
  
  
• Dismissal during or after family leave
  The Bill also introduces specific protections against dismissal during pregnancy and following periods of statutory family leave.
  
  
• Key dates and events
  • Date TBC - Consultation to take place on length of IPE
  
  • Autumn 2026 - provisions expected to come into force
  
  
• Further reading
  Read our article for more information.
  
  

Fire and rehire:

• Automatic unfair dismissal
  The Bill would make fire and re-hire dismissals (otherwise known as ""dismissal and re-engagement"") automatically unfair save for in limited circumstances. To justify the dismissal of an employee for refusing to agree to contractual changes, employers will need to demonstrate:
  
  • An essential business need: that the proposed contractual changes were essential to avoid substantial financial harm to the business which were affecting or were likely ""in the immediate future to affect"" the employer's ability to carry on its business; and
  
  • Exhaustive efforts: that in the circumstances the employer could not reasonably have avoided the need to make the variation.
  
  The government has confirmed that it intends to consult in 2025 on updating the Code of Practice on dismissal and re-engagement.
  
  
• Interim relief
  Consultation has taken place on whether interim relief should be extended to employees making unfair dismissal claims in fire and re-hire situations.The government has decided that this would not be an effective remedy at present and these proposals will not be taken forward.
  
  
• Commencement
  • The dismissal and re-engagement provisions of the Employment Rights Bill will come into force once commencement regulations are made. As these provisions do not require substantive regulations, they may take effect sooner than other parts of the Bill that do, but the government is yet to confirm timescales.
  
  
• Key dates and events
  • 2 December 2024 - interim relief consultation closed.
  
  • 4 March 2025 - government shares response to ""Making Work Pay: Strengthening remedies against abuse of rules on collective redundancy and fire and rehire""
  
  
• Further reading
  Read our article for more information.
  
  

Collective redunancy:

• Changes to establishment rule
  Employers currently proposing 20 or more redundancies at a single establishment within a 90-day period must engage in collective consultation with elected representatives before making redundancies. This requirement is known as the ""establishment rule.""
  
  The original version of the Bill sought to abolish the establishment rule entirely. This would have increased the frequency with which employers were required to collectively consult across their organisations. However, in March 2025 the updated Bill introduced a revised approach. The proposal now is for the duty to collectively consult to be triggered either where 20 or more redundancies occur at a single establishment or where a new ""threshold test"" is met. This test will require employers to aggregate the number of affected employees across all sites within the organisation. The specific threshold for this test will be set out in future regulations.
  
  The government has said that in order to help employers comply with the new rules, it will ""in due course"" issue guidance on consultation processes for collective redundancies.
  
  
• Protective award changes
  Currently, employers may be required to pay a protective award of up to 90 days’ pay per affected employee if they fail to follow redundancy consultation rules. Following consultation, the government has updated the Bill to increase the protective award to 180 days' pay per employee, allowing tribunals more discretion to make higher awards.
  
  In the same consultation, views were also sought on whether interim relief should be available to employees who claim a protective award. The government has decided that this would not be an effective remedy at present and these proposals will not be taken forward.
  
  The government has said it tends to gather further views on strengthening the collective redundancy framework in 2025.
  
  
• Key dates and events
  • 2 December 2024 - consultation on protective awards closed
  • 4 March 2025 - government shares response to ""Making Work Pay: Strengthening remedies against abuse of rules on collective redundancy and fire and rehire"" confirming that the maximum period of the protective award will be increased from 90 days to 180 days.
  
  

Public sector outsourcing:

• Public sector outsourcing
  The Bill aims to protect workers in public sector outsourcing arrangements, by introducing the power to pass regulations ensuring that outsourced workers are treated fairly.
  
  
• Relevant outsourcing contracts
  A ""relevant outsourcing contract"" is defined as a contract that involves the supply of services previously performed by a public contracting authority. It also applies to framework agreements facilitating such contracts. Workers covered under these provisions, referred to as ""transferring workers,"" are individuals performing functions under the outsourcing contract who were previously employed by the contracting authority in similar roles. The protections extend to ensuring these workers are not treated less favourably by the new supplier or subcontractors than they were by the contracting authority.
  
  
• Obligations and protections
  The Bill grants the power for the Secretary of State to pass regulations requiring specific provisions in relevant outsourcing contracts. The provisions must ensure that transferring employees are treated no less favourably than they were as employees of the contracting authority, and that workers who are not transferring workers are treated no less favourably than transferring workers.
  
  Contracting authorities must take reasonable steps to ensure these provisions are included in relevant contracts and must also work to secure compliance. A mandatory code of practice will provide guidance to contracting authorities on ensuring fair treatment of workers during outsourcing, which must be published and adhered to by relevant authorities.
  
  
• Commencement
  • These provisions will not come into force immediately after the Bill is passed. Instead, they will require further substantive regulations to be made, meaning their implementation could be delayed until the necessary secondary legislation is introduced.
  
  

Zero hours workers:

• ""Guaranteed Hours Offers""
  Employers will be required to make a guaranteed hours offer to qualifying workers, based on their average hours worked during a designated reference period. Qualifying workers then have a specific response period to accept or reject the offer. This process aims to align contracts with actual working patterns, offering greater predictability to workers.
  
  ""Qualifying workers"" will include zero hours workers who are employed (whether or not continuously) and workers with a minimum number of contractual hours. The specific minimum number of hours will be set out in future regulations and is not yet known. Additionally, during a reference period (the length of which will also be defined in future regulations), the worker must work a certain number of hours. For workers with contractual minimum hours, the hours worked during the reference period must exceed their contractual minimum in order for the worker to be a qualifying worker.
  
  The system will be cyclical, meaning that if a qualifying worker’s hours increase again after rejecting or completing a previous guaranteed hours offer, the employer will be required to repeat the process and issue a new offer. The government has also confirmed that where work is genuinely temporary, businesses will be able to offer workers temporary contracts.
  
  In March 2025, the Bill was updated in order to set out how agency workers will also qualify for the right to guaranteed hours offers (see below).
  
  Much of the system’s detail will be determined through future regulations, including:
  
  • The minimum hours level for a low hours worker to count as a qualifying worker
  • The duration of the reference period for calculating average hours
  • The length of the response period for workers to consider the offer
  • Temporary guaranteed hours for periods of fluctuating demand
  • Exemptions for specific industries or roles.
  
  
• Right to information about guaranteed hours offers
  The amended Employment Rights Bill, published on 27 January 2025, introduces a duty on employers to take reasonable steps to ensure that workers who it is reasonable to consider might become qualifying workers are made aware of their rights regarding guaranteed hours offers.
  
  The obligation arises during the ""initial information period,"" which is the two-week window in which employers must act. For workers who are already employed on the day the relevant provisions of the Bill come into force (the ""commencement day""), employers have two weeks from that date to ensure that those it is reasonable to consider might become qualifying workers are made aware of their rights. For new workers, or workers whose circumstances change, the employer has two weeks from the start of their employment or the point at which it becomes reasonable to consider that they might become qualifying workers to make them aware of their rights.
  
  Employers are also required to ensure that workers continue to have access to specified information about their rights after the initial information period. This obligation applies throughout the worker's employment, provided it remains reasonable to consider that the worker might become, or might again become, a qualifying worker in a reference period. The aim of this provision is to ensure that workers are informed of their rights in a timely manner and retain ongoing access to the relevant information during their employment.
  
  
• Reasonable notice of shifts and compensation for late changes
  The Bill introduces new rights for workers to receive reasonable notice of shifts, as well as compensation for late changes, cancellations, or curtailments. Employers will need to provide advance notice of shift schedules, with any late changes triggering compensation obligations.
  
  Where a shift is cancelled, moved, or shortened without sufficient notice, workers will be entitled to compensation. This compensation will not exceed the pay for the lost shift, but the exact amount and definitions of terms such as ""short notice"" and ""qualifying shift"" will be outlined in regulations. The government notes that what is considered ""reasonable notice"" will be case-specific, and will set the parameters in secondary legislation accordingly. Guidance will be published before these measures come into force.
  
  The Bill also empowers the Secretary of State to extend these protections to agency workers(see below).
  
  
• Application to agency workers
  In March 2025 the Bill was updated to set out how agency workers will benefit from both the right to guaranteed hours offers, and the right to reasonable notice of shifts and compensation for late changes.
  
  In respect of the right to guaranteed hours offers, the updated Bill confirms that the end-hirer will be responsible for making guaranteed hours offers to qualifying agency workers. When it comes to reasonable notice of shift and compensation for late changes, the updated Bill confirms that the agency will be responsible for any payments due to the agency worker. However, the Bill also contains a mechanism under which agencies will be able to recoup costs from end-hirers if necessary.
  
  
• Contracting out using collective agreements
  The Bill as amended in March 2025, introduces a mechanism to contract out of the new rights to guaranteed hours offers, reasonable notice of shifts, and compensation for late changes, cancellations or curtailments. This is only possible where there is a relevant collective agreement in place.
  
  A relevant collective agreement must be in writing and made by or on behalf of one or more independent trade unions and the worker’s employer. Where the relevant terms of such an agreement are incorporated into the worker’s or agency worker’s contract, and the individual has been notified in writing of both the incorporation and its effect, the statutory rights do not apply.
  
  If a guaranteed hours offer has already been made, it may be withdrawn by notice where the relevant collective agreement terms have been incorporated. In those circumstances, the worker cannot accept the offer. However, a claim may arise if such notice is given in circumstances where the legislation does not permit it.
  
  
• Commencement
  • These provisions will not come into force immediately after the Bill is passed. Instead, they will require further substantive regulations to be made, meaning their implementation could be delayed until the necessary secondary legislation is introduced.
  
  
• Key dates and events
  • 2 December 2024 - Consultation closed on the application of the right to guaranteed hours to agency workers.
  • 27 January 2025 - amended version of the Bill published, containing more information on who will be a ""qualifying worker"" and on the duty on employers to make relevant workers aware of their rights.
  • 4 March 2025 - government confirms it will table amendments to the Bill in order to apply each of the zero-hours provisions to agency workers.
  
  
• Further reading
  Read our article for more information (please note this article is based on the original version of the Bill).
  
  

Family-related rights:

• Dismissal during pregnancy
  The Bill introduces a power to make regulations to protect expectant mothers from dismissals (other than redundancy, which is covered under existing law), during or after a protected period of pregnancy. Further detail will be set out in regulations, including how the protected period is calculated and how the protection can apply even after pregnancy, such as in cases of miscarriage.
  
  
• Dismissal following a period of statutory family leave
  The Bill also introduces a power to regulate dismissals during or after periods of statutory family leave including maternity, adoption, shared parental leave, neonatal care leave, and bereaved partner's paternity leave. Regulations will clarify how the protection will work, and will set out mechanisms to handle dismissals deemed unfair under these protections.
  
  
• Day-one rights to parental and paternity leave
  Under the current system, employees must meet certain length-of-service requirements to qualify for parental and paternity leave. The Bill removes these qualification periods, allowing employees to access these rights from their first day of employment.
  
  
• Ability to take paternity leave following shared parental leave
  The Bill removes the current restriction preventing employees from taking paternity leave and pay after shared parental leave and pay.
  
  
• Enhanced bereavement leave rights
  The Bill introduces statutory rights to unpaid bereavement leave for employees who experience the loss of a close family member or dependent. The details of entitlement, including the duration and eligibility criteria, will be defined in secondary legislation. This represents the expansion of the existing right to bereavement leave in the event of the death of a child. The government has said it will support bereavement leave for pregnancy loss before 24 weeks. We are expecting further debate on this point as the Bill progresses.
  
  
• Commencement
  • The parental and paternity leave service requirement changes, as well as the ability to take paternity leave following shared parental leave, are likely to require commencement regulations only, and therefore could come into force soon after the Bill is passed.
  • The remaining changes under this section will require substantive regulations in order to come into force, meaning their implementation could be delayed until the necessary secondary legislation is introduced.

Flexible working:

• Refusing flexible work requests
  Under the Bill, employers will only be entitled to refuse an application for flexible working if a specified statutory ground applies, and if it is reasonable to refuse the request on that ground. Employers will be required to explain their reasoning in the refusal notification.
  
  
• Commencement
  • This change will come into force once commencement regulations are made. As no substantive regulations are required, this change may take effect sooner than other parts of the Bill.
  
  

Sick pay:

• Removal of SSP waiting days
  The Bill will remove the current three-day waiting period before statutory sick pay (SSP) kicks in. This means that SSP will be payable from the first sick day rather than the fourth.
  
  
• Removal of lower earnings limit
  The Bill will remove the lower earnings limit for the payment of SSP. Under the Bill. The weekly rate of SSP will be the lower of the prescribed weekly rate and 80% of the employee's normal weekly earnings. The prescribed rates will be finalised in an Order.
  
  
• Commencement
  • The removal of the current three-day waiting period before SSP kicks in requires commencement regulations only. As no substantive regulations are required, this change may take effect sooner than other parts of the Bill.
  • The provision of the removal of lower earnings limits will require substantive regulations before coming into force.
  
  
• Key dates and events
  • 3 December 2024 - government confirmed SSP changes will also apply to Northern Ireland
  • 4 December 2024 - consultation closed on the removal of SSP waiting days and the lower earnings limit
  • 27 January 2025 - updated Bill introduced provisions applying SSP changes to Northern Ireland
  • 4 March 2025 - government shares consultation outcome ""Making Work Pay: Strengthening Statutory Sick Pay"" and confirms prescribed percentage of the employee's normal weekly earnings will be 80%.
  
  

Discrimination and harassment:

• Duty to take ""all"" reasonable steps to prevent sexual harassment
  The Bill will expand the current duty on employers to take reasonable steps to prevent the workplace sexual harassment of staff. Under the Bill, employers will be required to take ""all"" reasonable steps to prevent such harassment.
  
  The Bill also sets out the power for the Secretary of State to make regulations specifying the steps employers must take in order to comply with their harassment prevent duties
  
  
• Third-party harassment
  The Bill will make employers liable for the acts of third parties who harass staff, unless the employer takes all reasonable steps to prevent such harassment. It is important to note that this liability for third-party harassment will apply to all types of harassment, and not just sexual harassment.
  
  
• Whistleblowing protection for sexual harassment disclosures
  It will be a protected disclosure for a worker to report that sexual harassment has occurred, is occurring or is likely to occur. This will make it clearer that staff who complain of sexual harassment will be protected from detriment and dismissal under the whistleblowing framework.
  
  
• Commencement
  • These provisions will require commencement regulations to take effect. However, as the Bill allows for further regulations to specify what constitutes ""reasonable"" steps for employers to take, it is likely that these additional regulations will be introduced before the main provisions come into force. This means there may be a delay in implementation while the necessary guidance is developed.
  
  

Equality action plans:

• Duty for large employers to publish equality action plans
  The Bill contains the power to require employers with 250 or more employees, to develop and publish an equality action plan outlining steps taken to address prescribed matters relating to gender equality, such as reducing the gender pay gap and supporting employees through menopause. Public authorities may also be included in this.
  
  
• Commencement
  • These provisions will not come into force immediately after the Bill is passed. Instead, they will require further substantive regulations to be made, meaning their implementation could be delayed until the necessary secondary legislation is introduced.
  
  

Trade unions and industrial action:

• Right to statement of trade union rights
  The Bill introduces a new duty on employers to inform workers of their right to join a trade union. Employers will be required to include this information in the written statement of particulars already provided under the Employment Rights Act 1996. Workers must also be reminded of this right on a regular basis, with details of the timing and manner of communication to be set out in future regulations. Failure to provide the statement will be treated in the same way as failure to provide a section 1 statement.
  
  
• Right of trade unions to access workplaces
  The Bill provides a framework for ""qualifying"" trade unions to negotiate access agreements with employers. Qualifying trade unions are trade unions with a certificate of independence.
  
  Access agreements will allow unions to access workplaces for purposes such as recruitment, organising members, and facilitating collective bargaining. Access includes both physical access and digital communication with workers (for example, via intranet or email). If employers and unions fail to agree on access terms, the Central Arbitration Committee (CAC) will determine the terms of access. The CAC will also have enforcement powers to address breaches of access agreements and impose penalties where necessary. Access agreements will not be legally enforceable contracts and may only be enforced through the CAC complaint process.
  
  The Bill contains the power for the Secretary of State to pass regulations setting out the circumstances in which it will be reasonable for the CAC to make a determination that a union's access request can be rejected. The government will also use secondary legislation to provide the CAC with a framework for fines to be issued for non-compliance with the right of access.
  
  
• Strengthening facility time and access to facilities
  The Bill strengthens the right to reasonable paid facility time by creating a presumption in favour of the union representative’s view of what is reasonable. Employers will need to prove otherwise if they dispute the representative’s assessment. It also introduces a statutory requirement for employers to provide union representatives with access to workplace facilities, such as office and meeting space, to support their duties. The Bill establishes a new right for trade union equality representatives to take reasonable time off to promote workplace equality, arrange training, provide advice, and consult with employers on equality matters.
  
  
• Trade union recognition
  The Bill simplifies the statutory union recognition process. The requirement for unions to demonstrate that a majority of workers in the bargaining unit are likely to support recognition at the application stage will be removed. The current 10% membership threshold will remain, but the government will have the power to adjust this to a level between 2% and 10% via secondary legislation.
  
  In recognition ballots, the existing requirement for both a majority of votes cast and support from at least 40% of the bargaining unit will be removed. Going forward, a"