The Employment Rights Bill: the biggest change in employment law for a generation
The Employment Rights Bill, expected to receive Royal Assent this Autumn, introduces a wave of landmark changes to UK employment law – most notably, the Bill establishes a statutory right to claim for ordinary unfair dismissal from ‘Day 1’ of employment.
Unfair Dismissal, 2027 – the big one:
- Day-One Protections: removal of the existing two-year qualifying period, meaning that employees will be able to bring ordinary unfair dismissal claims from the first day of employment.
- However, there will be an initial statutory probationary period: introduction of a new statutory probationary period, known as the “initial period of employment”. During this period – and for three months after, if notice is given before its end – employers may follow a “light-touch” process for dismissals resulting from conduct, capability, illegality, or some other substantial reason (“SOSR”) relating to the employee.
The maximum duration of this period is yet to be confirmed but is expected to be 9 months.
- Compensation Limits: A lower compensation limit is expected for dismissals during the initial period, subject to further Government consultation.
- Dismissals – Redundancy and Employer-Based SOSR: these dismissals will not benefit from the simplified process. Full unfair dismissal protections and statutory compensation limits will apply from Day 1.
Key Changes:
- Family Rights, April 2026: removal of qualifying period for statutory paternity and unpaid parental leave, and introduction of statutory bereavement leave following the death of a dependant, including for loss of a child in the first 24 weeks of pregnancy.
- Sick Pay, April 2026: day 1 (rather than day 4) entitlement and removal of Lower Earnings Limit.
- Harassment, October 2026: introduction of employer liability for third-party harassment, and requirement for employers to take “all-reasonable steps” to prevent harassment, of employees.
- Tribunal Claims – Time Limits, October 2026: limitation period for most claims will increase from 3 to 6 months (less a day). The main exception is for breach of contract claims, which will remain at 3 months.
- Flexible Working, 2027: employers may only refuse a statutory flexible working request following consultation with the employee and for 8 statutory grounds. The refusal must be ‘reasonable’, and the reasoning communicated to the employee.
- Zero Hours Contracts, 2027: employers will be required to offer qualifying zero and ‘low’ hours (including agency) workers guaranteed hours, reflective of the hours worked during a specified ‘reference period’ (‘low hours’ and ‘reference period’ yet to be defined). Additional rights to reasonable notice of shifts, and payment for cancelled, moved and curtailed shifts.
- Collective Redundancies, 2027: addition of a second multi-establishment trigger, yet to be determined but expected to be a percentage or number of employees across all UK-establishments. Maximum protective award for non-compliance expected to double.
- Non-Disclosure Agreements, 2027: any provision in an agreement between an employer and a worker seeking to prevent the worker from disclosing workplace discrimination and harassment will be void. We are expecting exceptions and will update you once we know more.
** Please note that the dates above are indicative but may change.
Is this definitely happening?
It seems so! The House of Lords proposed significant changes to the Bill, including a 6-month qualifying period for unfair dismissal and a simplified dismissal process thereafter, which the House of Commons largely rejected in favour of their original proposals.
Of course, the devil will be in the detail. In particular, the consultations expected in respect of zero-hours contracts, non-disclosure agreements and unfair dismissal are likely to lead to some adjustments. However, the underlying basic principles appear to be largely set.
What should businesses do now?
Get ready!
- Consider your recruitment procedures in light of the above.
- Once we have final detail, review and update your contracts, policies and handbooks to reflect the new rights and processes.
- Offer training to senior management to ensure they are equipped on lawful dismissals during and after the initial period of employment.
- Check in with us! The finer details have not yet been finalised and once implemented, these reforms are likely to generate substantial case law. Seek legal advice on a case-by-case basis, particularly before dismissing an employee.
Please contact Nicola Tager and Lucy Voyce for further guidance.