The bill outlined changes to employment law, which included: day-one unfair dismissal and parental leave rights, a ban on exploitative zero-hours contracts and fire and rehire practices, reformed statutory sick pay, and a repeal on anti-union legislation.
It also outlined plans to consult on a right to switch off, ethnicity and disability pay gap reporting, and creating a new employment status definition.
The legislation is not likely to come into force until autumn 2026 at the earliest.
Unfair dismissal and probation
The legislation is due to remove the two-year qualifying period for unfair dismissal, instead providing workers with a day-one protection from unfair dismissal.
Alongside the legislation, the government claimed that it will consult employers on updating the probationary period for new hires. It stated that it hoped to enable “businesses to take chances on hires while giving more people confidence to re-enter the job market or change careers”.
Alex Mizzi, legal director and employment lawyer at law firm Howard Kennedy, told HR magazine: “The government's announcements indicate that employers will be expected to give employees in their probation period at least some warning that their performance is not up to scratch before dismissing them.
“This is going to force employers to tighten up their processes for assessing performance for recent hires. At the moment, this is often left until the last few days of the probation period. That approach won't work once these changes come into force.”
Mizzi added that the changes to probationary periods could cause added pressure for employers when recruiting new hires.
“It will put pressure on employers to get hiring decisions right, and manage performance actively, both during probationary periods and beyond,” she continued.
Zero-hours contracts
The bill claimed to end ‘exploitative’ zero-hours contracts. Workers on zero-hours or low-hours contracts are to be granted the right to guaranteed-hours contracts if they work regular hours over a 12-week reference period.
This would require employers to provide reasonable notice of shifts and compensation when they cancelled shifts. Government representatives said that this would give workers security of earnings.
Employees who wish to can remain on zero-hours contracts.
Martin Williams, head of employment and partner at law firm Mayo Wynne Baxter, explained that the impact that zero-hours contract reforms would have on employers was unclear.
Speaking to HR magazine, he said: “The zero-hour contracts proposals are amazingly complicated, which will add an extra administrative burden on employers, who will be trying to work out how they comply with the law.
“However, it could mean greater flexibility for employers by broadening the possibility for a wider group of employees to take on.”
Read more: Record high numbers of young people are on zero-hours contracts
Fire and rehire
Part of the changes to unfair dismissal rights involve the government cracking down on fire and rehire practices, particularly of working parents.
The government has weakened its original stance on fire and rehire, however, according to David Browne, head of employment at law firm Shakespeare Martineau.
“Although cases of fire and rehire are splashed over the headlines when they happen, such as Tesco’s notable case only a few weeks ago, it’s rare that it's used at all, let alone abusively,” he told HR magazine.
“By not banning the practice outright, as many anticipated, the government has narrowed the occasions on which fire and rehire may be permitted, which is in line with the already existing Acas Code of Practice introduced earlier this year. This does further safeguard employees, however it’s not the radical change that was anticipated.”
Parental leave
The government has promised to establish a day-one right to paternity, parental and bereavement leave for employees.
This will include improved protections for pregnant women and new mothers. The day-one right to unfair dismissal will extend to protecting women from dismissal while pregnant, on maternity leave and within six months of returning to work. It will also apply to those on adoption or shared parental leave.
Natasha Kitson, founder of parental guidance consultancy Maternity Mentor, suggested that employers will have to be more proactive in their support for working parents.
She told HR magazine: “The proposed changes have potential to create a more inclusive and supportive work culture for parents, helping to bridge the gap between employer expectations and the realities of working parenthood.
“Employers will need to be more proactive in accommodating flexible working requests and creating environments that support work-life balance such as destigmatising taking leave to care for your child.”
Kitson called on the government to provide greater enforcement mechanisms for parents who faced discrimination.
Sick pay
Statutory sick pay (SSP) is set to be reformed under the legislation. The government intends to remove the lower earnings limit and the current three-day waiting period before workers become eligible for sick pay.
It is also due to form a Fair Work Agency, which will be responsible for enforcing holiday pay and strengthening SSP.
Brigitte Weaver, employment lawyer at Katten Muchin Rosenman LLP, described the changes as a positive move for employees.
Speaking to HR magazine, she said: “It’s good news for employees, particularly women, who tend to be disproportionately affected by the three-day waiting period.”
But the changes could come at a cost to small businesses, said Andrew Macmillan, employment partner at Spencer West LLP, who told HR magazine: “A recent government report concluded that the overall impact of SSP reform is difficult to predict, but even if they did not result in lower levels of sickness absence, larger firms would probably be able to absorb the costs.
“This would not necessarily be true for smaller businesses. Therefore, we expect there will be strong calls on the government to consult with small and medium-sized businesses on the design of a potential small business rebate for SSP.”
The proposed changes did not account for people on long-term sick leave, or employees who are making a phased return to work, according to Angela Matthews, director of policy and research at the Business Disability Forum, a not-for-profit organisation for disability inclusion at work.
Speaking to HR magazine, Matthews said: “The changes to statutory sick pay are welcome, but often people who are unwell or recovering may need a phased return to work to help them manage their energy levels and condition.
“The current ‘all or nothing’ approach of SSP does not allow for that, and means that people are forced to return to full hours before they are ready, or not return to work and stay on SSP. This is obviously problematic for both the individual and the employer.”
Read more: Government plans right to request four-day work week
Flexible working
The government has set out to change the law to make flexible working a default for all.
Novo Constare, CEO of flexible jobs platform Indeed Flex, told HR magazine that he feared this would create more uncertainty for employers.
He said: “The proposals will provide employees with greater rights and improved job security, but it won’t happen overnight.
“Firms across the country have faced huge challenges in recent years, and there is a risk that these proposals could lead to more uncertainty. Further details and clarity are needed as quickly as possible, so that employers have plenty of time to get their ducks in a row and to ensure that hiring strategies aren’t interrupted.”
An Increase in flexible working requests would be difficult for SMEs, according to Gareth Burrows, founder of a HR platform for SMEs, Breathe HR.
Speaking to HR magazine, he said: “Processing flexible working requests will be important but time-consuming work for already stretched HRs at SMEs.”
Unions
The Employment Rights Bill will repeal the previous Conservative government’s Minimum Service Levels (Strikes) Act legislation, which required a minimum number of employees to work while industrial action took place.
This will give unions “greater freedom to organise, represent and negotiate on behalf of their workers” and also make it easier for trade unions to gain recognition.
The changes would create a new relationship between unions and employers, Anna Dabek, employment and pensions partner at law firm Anthony Collins, predicted.
She told HR magazine: “Labour’s predictable repeal of the unpopular Minimum Service Levels (Strikes) Act law will be welcomed by most, as it was a deeply divisive but essentially unused piece of legislation. In addition, the bill sets out a raft of not-insignificant changes for the relationship between unions and employers. We wait to see how these will bed down in practice.”
Minimum wage
The cost of living will be taken into account, the legislation noted, when setting the minimum wage. Discriminatory age bands are also due to be removed from minimum wage rates.
Redundancy
The bill also changes employers’ obligations around mass redundancies, or when 20 or more employees are made redundant within a period of 90 days or less. This means that employers will be required to consult with “appropriate representatives”.
They will need to notify the secretary of state about proposed redundancies; not doing so will become a criminal offence.
‘Beyond the Bill’
The Labour Party announced that it would introduce a right to switch off, ahead of the general election this year. However the bill states that this will be introduced “subject to consultations”.
The government has also committed to introducing an Equality (Race and Disparity) Bill, as announced in its election manifesto, which would require large employers to publish their ethnicity and disability pay gap data.