Though the Employment Rights Bill is in the final stages of progressing through Parliament, the future of the legislation has been called into question following Deputy Prime Minister Angela Rayner’s resignation from government. Employment partner at Excello Law, Hina Belitz, summarises the legislation and why transparency around its future is so important in this short article.
The Bill is set to introduce extensive reforms to UK labour laws, with the stated aim of strengthening worker protections and modernising workplace practices. For employers to adequately prepare, they will need certainty of the scale and timetable of the new legal requirements being introduced.
What is set to change when the Employment Rights Bill becomes law?
The Bill’s reforms will be rolled out over a multi-year timetable. Key changes include making unfair dismissal an automatic right for all employees by 2027, expanding statutory sick pay and parental leave from day one (bereavement leave will also become statutory) and enhancing protections for employees against sexual harassment in the workplace and unfair redundancy.
From 2026, employers must justify refusals of flexible working requests and take all reasonable steps to prevent harassment. Non-disclosure agreements that silence victims of discrimination or harassment will be voided.
Among the most significant changes is reform of zero hours contracts. Workers who are on such contracts will gain the right to request guaranteed hours and compensation for cancelled shifts. This will in particular affect businesses in the health and social care, retail and hospitality industries; for the latter, it is key to note that tipping procedures must be regularly reviewed.
The government will also introduce a new Fair Work Agency to enforce rights like holiday pay and sick leave, while whistleblowing laws will now cover sexual harassment disclosures. Industrial action rules are set to be relaxed, with longer mandates and reduced notice periods, and union rights will be bolstered with new entitlements for representatives. The bill also extends the time limit for employment tribunal claims to six months and mandates gender pay gap and menopause action plans.
Is the Bill likely to be changed?
Key proponents of the Employment Rights Bill are now no longer in government: Angela Rayner (now ex-Deputy Prime Minister) has resigned her role, and Justin Madders (formerly Parliamentary Under-Secretary of State for Employment Rights, Competition and Markets) has been removed from his position in the reshuffle that followed Rayner’s departure from government.
This has led to concerns as to the future of the Bill, which has already been through several iterations as members of Parliament raised concerns with how its provisions may end up adversely impacting small businesses, which have less resources than larger employers when it comes to putting in place formal HR processes, and are thus more vulnerable to Tribunal claims.
Prime Minister Sir Keir Starmer has reportedly stated in a meeting of the Parliamentary Labour Party that “the Employment Rights Bill will continue with the same substance and timetable as before”. While his comments aim to reassure supporters of the Bill that its essence will be the same, they do not necessarily provide any clarity for employers as to what they can expect going forward.
The changes introduced by any Employment Rights Bill would be immense, and employers would need substantial time, information and resources to prepare. Providing certainty will be critical going forward, as otherwise employers could quickly find themselves on the wrong side of the law.
