The Employment Rights Bill, introduced in the House of Commons on 10 October 2024, promises to reshape the industry with significant amendments and announcements.
Key provisions:
- Unfair Dismissal: The Bill removes the qualifying period for unfair dismissal, currently set at two years.
- Statutory Sick Pay (SSP): Strengthening SSP by removing the requirement that an employee must earn above the Lower Earnings Limit (LEL) and eliminating the three ‘waiting days’.
- Zero-Hour Contracts: Guaranteed hours for workers who meet certain conditions will be offered at the end of a relevant reference period, that reflects hours worked. Additionally, workers will be entitled to receive reasonable notice of shifts and changes, and payment for shifts cancelled, moved, or curtailed at short notice.
- Fire and Rehire: Clause 22 introduces a new type of “automatically unfair dismissal” for cases where workers are dismissed for not agreeing to variations in their contract or because their employer wants to rehire them on different terms.
- Time Limits: Clause 10 increases the time Claimants have to bring most claims to the Employment Tribunal from three months to six months, excluding redundancy claims which already have a six-month limit.
- Trade Unions: Clause 46 establishes new rights for trade unions to access workplaces, simplifying information requirements for industrial action ballots, introducing e-balloting, extending the expiry of mandates for industrial action from six to 12 months, and streamlining the trade union recognition process.
Umbrella Regulations:
A recent consultation, focused on the most effective way to address issues of tax and employment rights non-compliance by umbrella companies, concluded that from April 2026, recruitment agencies will be responsible for PAYE instead of umbrella companies. The Bill will also amend the definition of ‘employment business’ to bring umbrella companies within regulatory scope of the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
Collective Consultation:
The Government responded to a consultation on 4 March 2025, increasing the maximum period of the protective award from 90 to 180 days for employers in breach of collective consultation obligations.
Industrial Relations
Amendments will make it easier for trade unions to be recognised and access workplaces, including digital access and fast-track routes for access agreements. Industrial action rules will be simplified, extending the mandate period and making balloting easier with e-balloting.
Fair Work Agency (FWA)
The ERB creates a new state enforcement agency for specific employment rights – FWA. The FWA will be able to aid workers in employment cases and if the claim succeeds then the FWA’s costs will be recoverable from the employer. The FWA will be able to bring Tribunal claims on behalf of workers. They will also be able to chase employers for unpaid sick pay and holiday pay and impose financial penalties on top of any compensation.
Timeline
The Bill has recently completed its third reading in the House of Commons and now moves to the House of Lords for debate. While the date for Royal Assent is not confirmed, commentators believe it may be as soon as summer this year, with some parts of the Bill likely coming into force before 2026.
