The Employment Rights Bill Receives Royal Assent

Key developments in the final week

The final stages of the Bill’s parliamentary passage focused in particular on proposals relating to unfair dismissal. These included changes to the compensation framework and the qualifying period for bringing an unfair dismissal claim.

In the closing debates, the government proposed amendments to remove the existing compensation cap for unfair dismissal claims, alongside a move away from day-one unfair dismissal rights in favour of a six-month qualifying period. This approach differed from amendments proposed in the House of Lords, which had raised concerns about the timing of the changes and called for a review of the compensation cap following consultation.

The House of Commons did not accept the Lords’ alternative proposal, and the Bill was returned to the upper chamber. The Lords subsequently approved the legislation, and the Bill received Royal Assent on Thursday, 18 December.

Implementation still to follow

While the Act has now received Royal Assent, many of its practical effects will depend on further regulations and guidance. The government has indicated that a significant number of consultations will take place to inform the detailed implementation of the new framework, with engagement expected from both businesses and trade unions.

Areas where further detail is awaited include new protections for zero-hours workers, particularly around requirements to offer guaranteed hours reflecting established working patterns. Key concepts, such as how working patterns are assessed and how the rules will apply in sectors with seasonal or variable demand, will be addressed through secondary legislation.

Preparing for change

For employers, the Act signals a period of change that will unfold over time. Some measures take effect immediately, including the repeal of minimum service levels for industrial action, while many others will be introduced in stages and will require commencement regulations before they apply.

Employers will need to monitor developments closely as consultations progress, review existing policies in light of confirmed changes, and plan for the introduction of new requirements as further detail emerges.

We will continue to provide updates on the Act's implementation. For detailed insights into what employers can expect and how to prepare, visit our Employment Rights Act Hub.

For more information or advice, please contact Jessica Scott-Dye in our Employment team.