New Employment Bill sees government pull back from biggest employment shake-up in half a century

Yesterday, the UK government introduced the long-awaited Employment Rights Bill, a major piece of legislation aimed at enhancing workers' rights. However, many of the proposals have been scaled back compared to initial expectations. Robert Holland, Head of Employment Law at Aberdein Considine, explores the implications for both employers and employees.

"The Bill is undoubtedly the biggest shake-up in employment law since the 1999 Employment Relations Act, with its legislative scope only rivalled by the 1975 Employment Protection Bill," Robert explains. "However, it is clear the government has pulled back on several key measures, focusing mainly on public policy and strengthening Trade Union rights."

Five key takeaways:

1. The Bill is less radical than expected. Although it represents the most significant reform in 50 years, the Bill falls short of the sweeping changes many anticipated.

2. Zero-hours contracts stay, but with guaranteed hours and compensation. Zero-hours contracts are retained, but the Bill introduces guaranteed hours and compensation for cancelled shifts. These new rules also impact agency worker regulations.

3. Statutory protections kick in from Day 1. Employees will now receive Statutory Sickness Pay, bereavement, and paternity leave from their first day of employment.

4. Unfair dismissal protection starts immediately, but probation rules remain unclear. The removal of the two-year qualifying period gives employees Day 1 protection against unfair dismissal. However, some confusion surrounds how this applies during probationary periods.

5. Trade union rights are getting a major boost. The Bill strengthens rights and protections for trade unions, underscoring the government's focus on collective bargaining and worker representation.

"The much-rumoured removal of the two-year qualifying period has been enacted, meaning claiming unfair dismissal is now effectively a Day 1 right for employees," Robert continues. "Employers must justify any dismissal using one of the five fair reasons to dismiss. But that doesn’t mean employers can’t – or won’t – continue to dismiss employees; this is where probation periods come in. The government intends to consult on a statutory probation period, which could allow 'fault-free' dismissals during the first nine months of employment. While this provides some recourse for employers, the Bill remains unclear on the specific criteria for dismissals during probation."

"Naturally, trade unions and other workers’ rights groups were calling for a 'claim-free' probation period of up to a year. The government has a delicate balance to strike between protecting employees from unfair dismissal and protecting employers from being forced to retain employees who are genuinely unsuitable for their role. It seems they have not yet decided which way to lean."

On zero-hours contracts, Robert highlights the balance the government is trying to strike: "While the Bill introduces new rights for zero-hours workers, including guaranteed hours and compensation for cancelled shifts, it stops short of banning zero-hours contracts altogether. This preserves flexibility for industries like the gig economy, but changes to agency regulations may also be in the pipeline."

Many of the measures in the Bill will not take immediate effect. For example, the Day 1 right to claim unfair dismissal isn’t expected to be implemented until August 2026. "Employers will need to remain alert as the government’s consultations continue," Robert advises, "and be prepared for further changes as the regulations evolve."

Louise Powrie , Managing Director at Core-Asset Consulting, highlights the need to act strategically. "As we see these new regulations come into force, our goal is to help clients not just meet compliance standards but leverage these changes as a foundation for stronger employment practices. With the Employment Rights Bill introducing many new requirements, we are here to provide personalised support, helping businesses adapt smoothly and strategically."

Navigating the new legislation

With the Employment Rights Bill introducing significant changes, employers need to act now to ensure they are compliant with the new regulations while maintaining flexibility. To gain a deeper understanding of the Employment Rights Bill and how to prepare, join Robert Holland and Core-Asset Consulting for a free 1-hour webinar, where Robert will explore the key changes, offer practical advice for employers, and answer your specific questions about the new legislation.

Register your interest here to secure your place and ensure your business stays ahead of the curve.

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