Understanding the Employment Rights Bill: Key Changes and Implications for Employers and Workers

Like me, I am sure you have lots of questions regarding the new Employment Rights Bill and what it means for both employees and employers. While the bill represents a substantial overhaul of workers' rights, many of the most significant changes won’t come into effect until Autumn 2026. Still, it may take that long to prepare for the effects of these changes.

Let's break down the key reforms, address concerns, and discuss what steps businesses should take to prepare for the upcoming changes.

What’s Changing?

Touted as the "biggest upgrade to rights at work for a generation," the Employment Rights Bill introduces several key changes aimed at enhancing workers benefits and protections. While some of the measures are seen as groundbreaking, others have criticised it for being delayed or not going far enough. Here’s an overview of the key changes:

• Statutory Sick Pay (SSP): One of the headline changes is that employees will now be entitled to Statutory Sick Pay (SSP) from the first day they fall ill, rather than the fourth day, ensuring immediate financial support during illness.
• Lower Earnings Limit for SSP: Currently, workers earning less than ￡123 per week are not eligible for SSP. Under the new bill, this lower earnings limit will be removed, making more low-income workers eligible for SSP, albeit at a reduced rate.
• Paternity Leave: Paternity leave is being enhanced, as fathers and partners will now be entitled to paternity leave from day one of employment, as opposed to after 26 weeks.
• Unpaid Parental and Bereavement Leave: Unpaid parental leave and bereavement leave will now be available from the first day of employment, making these essential rights more accessible to employees without waiting for a qualifying period.
• Flexible Working: The right to request flexible working will also see an upgrade. Employers will be required to consider any flexible working requests from day one of employment and approve them unless there is a valid business reason to reject the request.
• Zero-Hours Contracts: Workers on zero-hours contracts will gain greater protections. Employers will be required to offer a guaranteed-hours contract based on the worker's average hours over a 12-week period. Additionally, employers must provide reasonable notice of shift changes and offer compensation for cancelled shifts.

Some Concerns...

While the bill is being praised for enhancing workers’ rights, there are concerns about how it will be implemented in practice, particularly for employers managing operational and business needs.

One notable change is the removal of the two-year qualifying period for unfair dismissal protection. This is seen as a win for workers, as it extends protections to an estimated nine million workers who have been with their employer for less than two years. However, employers will need to review their HR policies and practices to ensure they remain compliant with this new rule.

The issue of zero-hours contracts also remains contentious. While the bill introduces stronger protections for workers on these contracts, critics argue that these changes may not be sufficient to address the insecurity often associated with such arrangements, especially in industries such as hospitality, warehousing, and manufacturing. Business owners, on the other hand, will need to carefully manage workforce planning to accommodate the new rules around shift notifications and guaranteed hours.

What’s Next?

The Employment Rights Bill is still in its early stages, and many of the proposed changes won’t take effect for at least two years. During this period, a consultation process will allow businesses and stakeholders to provide input on how the new rules should be applied.

Over the next two years, you should look to review and update HR policies, employee contracts, and other relevant procedures to ensure compliance with the new legislation as as clarity of rules and regulations becomes available. Properly preparing will help you navigate this transition smoothly and ensure your business is prepared when the changes take effect.

Future Employment Law Reforms

It's important to note that the Employment Rights Bill may only be the beginning of a broader wave of employment law changes under the new government. Additional Labour pledges, such as the introduction of single worker status, the right to switch off (from work-related communications outside working hours), and the establishment of a single enforcement body for workplace inspections, are likely to come into force in the future.

However, for now, the focus remains on implementing the Employment Rights Bill. More details are sure to be released over the next two years of consultation, so make sure to keep yourself appraised of any changes that may affect you.

If you have any questions or need assistance, feel free to reach out. KMA HR are here to help.

Kim Holland

KMA HR Director