The publication of the draft Employment Rights Bill is the first big update on the Government’s employment rights plans since the Labour Party’s pre-election manifesto.
So, what are the key takeaways from any new announcements and clarifications included in the draft bill and how and when will they be implemented.
Changes will be enforced from 2026
This announcement is probably the most significant for small businesses, addressing widespread concerns about the need to implement major changes to contracts and processes within the coming months.
The Government has announced that most of the changes in the Employment Rights Bill won’t come into effect until at least 2026. The new laws will be governed by a new Fair Work Agency, which will also absorb existing enforcement bodies.
Nine-month statutory probation period
Most workers’ rights will be implemented from day one as planned, but the Government has announced a nine-month probation period where there will be a ‘lighter touch’ approach to dismissal. After nine months, full rights will be applied.
Day one rights for paid, paternity and bereavement leave
These changes are largely as expected. However, there are a few clarifications worth mentioning:
- Currently, maternity leave rights are already applicable from day one. These changes bring paternity leave in line with maternity.
- Employers will be required to create an established bereavement leave policy and apply benefits from day one.
- A full review of parental leave rights has been promised in the bill and will follow in due course.
Universal sick leave entitlement
Currently, employees are only entitled to statutory sick pay from the fourth consecutive day of illness. The Government has now clarified that it will introduce a universal entitlement to sick payments from the first day.
Zero-hours contracts
The banning of zero hours is another key pledge from the manifesto and now more details have been confirmed:
- Workers will have a legal right to request a fixed-hours contract after twelve weeks of employment.
- This will be based on the average number of hours worked over that period.
- Workers will be able to remain on zero-hours contracts if they prefer.
Fire & rehire
The Government have confirmed that businesses will still be able to engage in fire and rehire practices, but only when it prevents the business from bankruptcy. In all other circumstances, it will be banned as expected.
Minimum wage
The Government has announced that they will change the remit of the Low Pay Commission so that it can account for cost-of-living changes. This will make it easier for the minimum wage to rise in line with inflation. The bill also states that age bands will be removed, meaning younger workers will be entitled to the same rate of pay as older ones.
Help & advice
As Labour’s Employment Rights Bill will see the greatest change to employment law in more than a generation, it is reassuring to have greater clarity on the proposed changes—and, more importantly, the time for businesses to prepare for the implementation of these new policies.
Our HR team are here to guide you through the changes to employment law so you can be prepared when the new bill comes into force. For help and advice, please contact us on 01981 590514.
