Embracing enhanced employment rights: building a stronger, more committed workforce

A changing legislative landscape

Long before the 2024 general election, the Labour Party had indicated its intention to strengthen workers’ rights. Since coming to power, the government has reaffirmed this commitment through the introduction of the Employment Rights Bill - a comprehensive legislative proposal that rebalances the employment relationship in favour of greater predictability, job security and procedural oversight. While many of the provisions remain subject to consultation or secondary legislation, the direction of travel is clear.

You can expect new obligations in key areas such as dismissal, contract changes, flexible working and family-related rights. These reforms may increase compliance costs and require internal changes - but they also present an opportunity to revisit your workforce strategy, improve engagement and reduce long-term risk. This article provides an overview of key elements of the Bill and outlines practical next steps for employers navigating this evolving legal context.

Key proposals at a glance

The removal of the two-year qualifying period for ordinary unfair dismissal marks a major shift in risk profile. In its place, the Bill introduces an Initial Period of Employment (IPE), likely to be nine months, during which a simplified dismissal process may apply in certain cases. The IPE framework will not apply to redundancy or non-individual SOSR dismissals and is expected to include procedural safeguards, such as the right to be accompanied. A cap on compensation for dismissals during this period is also expected, subject to forthcoming regulations.

What this means for you: It's a good time to revisit your probation and early-stage performance management processes. Ensure they are clearly structured, consistently applied and supported by documentation and manager training to mitigate risk and maintain procedural fairness. A well-handled probation period can help you manage risk and make informed decisions early.

The Bill also proposes to make dismissal and re-engagement (commonly referred to as fire and re-hire) automatically unfair unless strict conditions are met. You will need to show that contractual changes were essential to avoid significant harm to the business and that no reasonable alternatives existed. A revised statutory Code of Practice will support this change and is expected to introduce more robust procedural standards.

What this means for you: If you regularly rely on contract variation, you’ll need to assess whether your current processes are sufficiently structured and well-documented to support fair and lawful implementation under the new regime. In anticipation of the forthcoming revised statutory Code of Practice, it will be important to ensure that any proposed contractual changes are underpinned by a clear business rationale, carefully considered alternatives, and a meaningful consultation process. Strengthening your approach now will help you manage future changes with greater confidence and reduce the risk of legal challenge.

Zero-hours and casual working arrangements are also under review. Employers will be required to offer guaranteed hours contracts to qualifying workers, based on actual working patterns. You will also need to compensate staff for short-notice shift changes or cancellations. Agency workers will be covered by the same rules, with responsibilities shared between the end-hirer and agency. These reforms aim to increase certainty and fairness in low-hours roles.

What this means for you: Consider whether more stable working arrangements could support both compliance and retention, particularly in roles with regular or predictable hours.  The proposed reforms will entitle qualifying workers to request contracts that reflect their actual working patterns, and introduce compensation for short-notice shift cancellations or changes. Reviewing whether your current arrangements remain appropriate will help you anticipate legal obligations and avoid potential liability, while also offering an opportunity to improve staff engagement in roles that may previously have been seen as insecure or inconsistent.

Family-related rights are set to be enhanced. This will include day one eligibility for parental and paternity leave, greater flexibility over the sequencing of paternity and shared parental leave, and extended protection against dismissal during and following pregnancy or family-related leave. In addition, employees will have a new right to unpaid bereavement leave following a close family loss, which may be extended to cover miscarriage before 24 weeks.

What this means for you: You should prepare to update your family leave policies and related procedures to reflect these changes, particularly in relation to eligibility, sequencing and protection from dismissal. With more employees qualifying for leave from day one and enhanced protections in place during and after periods of absence, it will be important to ensure that managers understand the extended entitlements and avoid decisions that could give rise to discrimination or unfair dismissal claims. Reviewing internal processes now, including how absence is covered and how return-to-work transitions are managed, will help support compliance and reduce the risk of unintentional missteps.

Further key proposals

• The extension of statutory sick pay (SSP) from day one and removing the lower earnings limit
• A statutory duty to take all reasonable steps to prevent workplace sexual harassment - including from third parties
• Reforming collective redundancy thresholds and protective awards
• The creation of a new Fair Work Agency to enhance enforcement

Trade union law is also undergoing significant reform. The Bill simplifies recognition procedures, strengthens facility time rights, and repeals several restrictions on industrial action introduced by the previous government. Together, these changes strengthen the position of trade unions in the workplace and expand workers' access to collective representation.

Overall, the Bill signals a shift towards enhanced individual rights, procedural formality, and greater transparency. While implementation will be phased, preparing now gives you a better chance of adapting smoothly and confidently.

Strategic implications for employers

Some of these proposals will increase your direct employment costs, especially where you rely on casual staffing models or make frequent contract changes. Others will limit flexibility in areas such as dismissal and shift scheduling or introduce new procedural obligations. These will require updates to internal processes and support to upskill your line managers.

In particular, the shift to day one unfair dismissal rights and the introduction of the IPE regime requires careful attention. Now is the time to assess whether your current probation processes are robust, fair and well-documented. This will include reviewing whether your line managers are equipped to manage early-stage performance or conduct issues under the new regime. In many cases, a more structured and consistent approach - backed by clear documentation and guidance - will help mitigate any risks.

Planning ahead puts you in control. Reviewing your workforce arrangements now allows you to:

• Identify potential compliance gaps
• Consult on any contractual changes well in advance
• Phase in internal reforms on a manageable timescale

Proactive engagement can also help mitigate litigation risk and reduce disruption once the new regime is in force

Planning for legal change

There is no one-size-fits-all approach, but these actions can help you prepare constructively:

• Audit key risk areas: Review current processes and documentation in relation to dismissal, working hours, family-related leave, and contract variation. Think about how the changes will affect your legal obligations - and your day-to-day operations.

• Review casual and variable working arrangements: Consider whether your current practices align with the proposed guaranteed hours regime.  More stable contracts might benefit both compliance and retention.

• Engage with line managers: Ensure your line managers understand what is changing and are supported in preparing for implementation, particularly in relation to dismissal and flexibility processes.

• Anticipate updates to internal policies and templates: Plan now for internal document updates, even if some legal details are still to come. Having a draft in place will help you move quickly when final regulations are confirmed.

• Prioritise high-impact reforms: Focus your resources on areas with the most immediate legal exposure - such as shift scheduling, dismissal risk, and family leave entitlements.

Looking ahead

Although many of the Employment Rights Bill’s provisions are not yet in force, the direction of reform is firmly established. This is not just a compliance issue - it is a strategic opportunity. By acting early and taking a structured, legal informed approach, you can:

• Reduce cost and complexity later
• Protect your organisation against disruption and legal risk
• Support a fairer, more predictable workplace culture

For advice on assessing the potential impact of the Bill on your organisation, or for support with planning and implementation, please contact Gareth Edwards in our Emplyment team on 07899 915 692. Alternatively, you can fill in the form below.