Employment Rights Bill introduces significant reforms for workers and employers

Key reforms explained

On Thursday 10 October, the government published its long-awaited Employment Rights Bill. The Bill proposes 28 individual reforms to UK employment law, many of which echo Labour's pre-election pledges.

The Bill is a lengthy document which will now undergo parliamentary scrutiny as it is considered and debated by both the House of Commons and the House of Lords. The first reading of the Bill took place on 10 October when it was introduced. The Bill's second reading is due to take place on 21 October.

Some of the key reforms contained in the Bill are as follows:

• Day one employment rights: Employees will no longer need two years of service to claim unfair dismissal. The Bill also provides for regulations to set out an 'initial period' of employment (or a statutory probationary period) during which a modified version of the right to unfair dismissal will apply. The length of the statutory probationary period is to be subject to consultation and then confirmed in regulations. The government has said it currently favours a nine month statutory probationary period. In practical terms, this will mean that employers will be able to fairly dismiss employees within the statutory probationary period, although they will need to follow some form of process in order to do so. As with the length of the statutory probationary period, the form of the process will be confirmed in future regulations. The government has confirmed that it expects these changes to take effect in Autumn 2026 at the earliest.

• Zero hours contracts: The Bill strengthens rights for workers on zero hours contracts by requiring employers to offer guaranteed hours if a worker consistently works more than their contracted hours over a set reference period (the length of which is to be confirmed in regulations). Zero hours workers in this position will also be entitled to compensation for qualifying shifts which are cancelled at short notice. Again, the devil will be in the detail here, as what will constitute "short notice", as well as the amount to be paid in the event of a shift cancellation, is to be specified in regulations.

• Flexible working: the Bill will make it harder for employers to refuse requests for flexible working. The grounds for refusal will remain the same, but where a flexible work request is refused, the employer will be under a statutory obligation to explain the exact basis for its decision, which must be objectively reasonable. The Bill also creates the power for regulations to be passed setting out the steps an employer must take in order to comply with the existing requirement to consult the employee before rejecting a request.

• Family leave: the Bill removes qualifying periods for paternity and parental leave, granting employees these rights from day one. Additionally, the Bill introduces new flexibility, allowing paternity leave to be taken after shared parental leave, so that the entitlement is not lost where shared parental leave is taken first, as it currently is.

• The prevention of harassment: the Bill introduces a duty for employers to take all reasonable steps to prevent workplace sexual harassment, and a duty to protect workers from harassment (of all types) by third parties such as customers or clients. Employers might recall that the last Government attempted to introduce a similar level of protection, but that Bill (now the Worker Protection (Amendment of Equality Act 2010) Act 2023) was watered down by the House of Lords before it passed into law. In terms of the practical effect of this reform, the forthcoming duty to take reasonable steps to prevent workplace sexual harassment will come into force on 26 October as planned. The new Bill highlights that this will nevertheless continue to be an area of priority for the government and that employers are likely to be held to even higher standards under the new law.

Insight into the government's long-term plans

The Government has also published a Next Steps to Make Work Pay document, which provides more detail on its plans to reform employment law beyond the Bill. Subject to consultation, the Government is considering introducing a 'right to switch off' through a statutory Code of Practice, This would prevent employees from being contacted out of hours except in exceptional circumstances.

There are also plans to address pay discrimination by requiring large employers to report their ethnicity and disability pay gaps. This will be achieved through the Equality (Race and Disability) Bill which will be introduced in Autumn 2024.

The Government also intends to embark on a number of consultations, including on a new employment status framework, under which there would be only two statuses: that of 'worker', and the genuinely self-employed.

Supporting employers to prepare for change

The Employment Rights Bill is a substantial document with numerous reforms, many of which will require detailed regulations to bring them into effect. With 28 individual reforms, there is a lot of information for employers to absorb. We will continue to monitor the Bill’s progression and provide updates on the key areas of focus. As further details emerge, we will provide practical guidance to help employers prepare for these significant changes.

It is important to note that the Bill still requires parliamentary approval and will not become law immediately. The Government plans to consult on many of the reforms in 2025, with the majority of changes expected to take effect no earlier than 2026.

Join our webinar on 16 October

To support you in navigating these complex changes, we are hosting a webinar on 16 October, where we will explore the key elements of the Bill in greater detail. This will be an opportunity to discuss how the proposed reforms could affect your organisation and provide insights on what employers can do to stay ahead of these developments. We encourage you to join us for this important discussion.

For more information or advice, please contact Gareth Edwards in our Employment team on 0117 314 5220, or complete the form below.