The Employment Rights Bill – what will it mean for businesses?

Summary of changes 

As expected, it has introduced a wide range of reforms that will significantly alter the way businesses handle employment issues and give HR departments a lot to think about.  

The Bill takes its lead from the “Make Work Pay” initiative, introduced in May and which formed a major part of the Labour party’s manifesto. Following their election victory in July, it was expected that a lot of what was in that document would become law and the Bill represents the first step in that process.  

The Bill aims to introduce 28 individual employment reforms and covers a wide variety of measures including Day One protection from unfair dismissal (in contrast to the current requirement for a worker to have two years’ continuous service before they gain that protection), access to statutory sick pay with no waiting period, significant enhancements to parental benefits and a clamp-down on what Labour has called “exploitative” zero hours contracts by giving workers the right to a contract with a pattern of hours that ties in more closely with the way they want to work.    

However, the term “exploitative” has caused some concern in sectors like hospitality, where employers claim zero hours contracts have a valid use to offer flexibility where it is needed.   

It is proposed that some changes will be implemented swiftly following the passing of the Bill. However, some of the provisions will remain under consultation and are not likely to be effected until 2026. 

Day-one rights and probationary periods 

A central component of the Bill is its guarantee of protection from unfair dismissal starting on an employee’s first day. This reform, replacing the current two-year requirement, is a dramatic shift.   

There will be a consultation in relation to the proposed length of a statutory probationary period to be introduced, during which an employee can be dismissed by an employer who will only have to follow a “lighter touch” process to justify the dismissal, without the risk of a tribunal claim. The Government’s preference for this is 9 months. Businesses often use this period to assess whether an employee is a good fit; not being able to dismiss an employee who isn’t working out without the worry of facing a tribunal may cause employers to reassess their procedures on recruitment.   

Other areas of the Bill focus on the following: 

Statutory sick pay (SSP): workers will be entitled to SSP from the first day they are ill, rather than the fourth day. Currently, workers earning less than £123 per week cannot claim SSP but this limit will be removed and those earning less than that amount will be able to claim SSP. 

Paternity leave: Fathers to be eligible from day one of employment, instead of 26 weeks 

Unpaid parental leave: Parents to be eligible from day one of employment, instead of one year. 

Unpaid bereavement leave: To become a “day one” right for workers 

Flexible working: Bosses will be expected to consider any flexible working requests made from day one, and say yes unless they can prove it is reasonable to refuse 

The ‘right to disconnect’ 

It had been anticipated that the Bill would introduce a “right to disconnect”, similar in form to laws passed in Belgium and France, where employees are protected from having to respond to communications from their employers outside working hours.  However, this has been excluded from the Bill at this stage and is likely to be revisited further down the line 

SMEs will be concerned 

While a lot of the provisions contained in the Bill are expected to proceed to a period of consultation before implementation from Autumn 2026, employers will nevertheless find that there will be a big call on both their time and resources. For SMEs, it will be harder as they are already operating at capacity. Businesses will need access to expert legal advice and guidance from experienced legal sources in order to make sure that what has started out as a landmark change to employment rights does not end up in tribunal claims, stress and financial worry.   

Robin White, rradar’s Legal Director – Head of Insured Employment said 

“The changes proposed in the Employment Rights Bill 2024 represent one of the greatest shifts in employment practices in decades. We anticipate that whilst there will need to be consultation on a wide range of matters that might not come into force for some time, businesses will need to be proactive in managing their policies and procedures in order to ensure compliance with the new legislation.” 

Need advice?  

Talk to our team of Employment legal experts if your business needs support in navigating changes that could have an effect.