In October 2024, the government proposed large-scale changes to employment law via the Employment Rights Bill. These changes are not yet in effect; however, consultation is underway and it’s important that all organisations are aware of what could be coming in the next few years.

The proposed employment law changes contained in the Bill are as follows:

Zero-hour contracts

The government has proposed to end zero-hour contracts, ensuring workers are entitled to a guaranteed-hours contract that reflects the hours they regularly work, based on a set reference period (yet to be defined). Under the Bill, workers will also be entitled to reasonable notice of shift changes and to be compensated if shifts are cancelled or cut short. Employees who prefer to remain on a zero-hour contract will still have the option to do so.

Fire and rehire

The government is proposing a ban on ‘fire and rehire’ practices except where there is no other viable option to ensure the survival of the business and where a proper procedure has been followed. The statutory code introduced by the previous government will also be replaced.

Unfair dismissal

The two-year qualifying service requirement for making a claim for unfair dismissal* will be removed. Instead, employers will have a new right to dismiss fairly during an “initial period of employment”, i.e. a probationary period (likely to be limited to nine months in length, although this is subject to consultation), where the reason for dismissal is conduct, performance, a statutory restriction, or SOSR (where the reason relates to the employee) – but not redundancy.

*Any dismissal linked to an automatically unfair reason does not require two years of continuous service to make a claim.

Day one rights

Statutory sick pay (SSP), paternity leave, parental leave, and bereavement leave will become day one rights, i.e. there will be no requirement to have been employed, or to be sick, for a period of time before qualifying for these rights. In addition, it is proposed that the lower earnings limit for receipt of SSP will be removed.

Flexible working

The day one right of employees to request flexible working will be enhanced, in that the grounds for refusal (which will remain the same as at present) must be reasonable. The main change will be the reasonableness test and there will be further consultation regarding this.

Single Enforcement Body

The Bill contains extensive provisions regarding the formation of a Labour Market Enforcement Body called the “Fair Work Agency”, which will have the power to enforce labour rights. This body will consolidate the enforcement roles currently handled by the HMRC’s National Minimum Wage enforcement team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate, with the remit of enforcing employment rights and compliance. It will also be responsible for enforcing holiday pay.

Trade Unions

The Employment Rights Bill contains several provisions regarding Trade Unions. The Bill proposes to amend much of the Trade Union Act 2016 and to repeal The Strikes (Minimum Service Levels) Act 2023. Notable proposals include:

• Requiring employers to provide employees with a statement outlining their right to join a Trade Union, either at the same time as the Section 1 Employment Rights Act 1996 statement or at other times as set out by the Secretary of State.
• Giving Trade Unions the right to access workplaces. This includes a process around access agreements, access requests, and response notices. There are also negotiating provisions. Ultimately, matters can be referred to the Central Arbitration Committee (CAC) where certain disputes/situations arise in this regard.
• Amending Trade Union recognition thresholds.
• Further provisions around funds, deductions and facilities.
• Provisions around balloting requirements for industrial action.
• Regarding electronic balloting, removing the reference to a review and pilot scheme, although the right to introduce alternative means of balloting (assuming this includes electronic balloting) is retained.
• Introducing protection against detrimental treatment for taking industrial action.