What’s in the Employment Rights Bill?

Day one right not to be unfairly dismissed

Now: Employees need to work for 2 years before they have the right not to be unfairly dismissed. There are no rules about probationary periods. Employers must give written reasons for dismissal to employees with 2 years’ service on request.

What the Bill says: Employees will have the right not to be unfairly dismissed. Accompanying regulations are expected to set out a light touch procedure allowing dismissal during an “initial period”, which will likely include a meeting with the employee to explain concerns (at which the employee could be accompanied).

The less onerous process is expected to apply where: (1) the termination date is no later than 3 months after the end of the initial period, provided notice was served during that period, and (2) the reason for dismissal is capability, conduct, illegality or some other substantial reason relating to the employee. This lighter process will therefore not apply to a redundancy dismissal.

The exact duration of the “initial period” is to be determined but the government has expressed a preference for 9 months.

The Bill also clarifies that there is no right to claim unfair dismissal if the employee has received an offer but has not actually started work. However, this is subject to a number of exceptions, including if the dismissal is related to political opinion or affiliation.

Employers will need to give written reasons for dismissal to employees following the initial period (or 3 months after, if notice has been served in the initial period).

What next: The regulations need to be drafted and the government have said they will extensively consult on this reform. Consultation will include the length of the initial period as well as the process required to dismiss somebody during this time (and how this interacts with the Acas Code). The government will also be consulting on the compensation regime for dismissals during probation.

These changes are not expected to take effect until at least Autumn 2026.

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Restrictions on ‘fire and rehire’

Now: The Code of Practice on fire and rehire was put in place in July 2024. The practice remains lawful, albeit increasingly high-risk from a reputational and industrial relations perspective.

What the Bill says: The Bill would severely restrict employers’ ability to use fire and rehire to change terms and conditions. It would make any dismissal automatically unfair where the reason for dismissal is that the employee did not agree to the employer’s attempt to vary their terms and conditions of employment, or because they intended to employ another person on varied terms to carry out substantially the same role. The Bill provides a limited qualified exception for employers acting in response to financial difficulties affecting their ability to carry on business as a going concern.

What next: The government will consult on proposals to lift the cap of 90 days’ pay on protective awards for failure to inform and consult in relation to collective redundancies in the context of fire and rehire exercises, as well as the potential role of interim relief as a remedy.

It appears that the government intends to introduce new regulations governing the consultation processes which financially-distressed employers must follow in relation to fire and rehire. It‘s unclear whether the government proposes to amend or replace the new Code of Practice, which Labour previously criticised as ‘inadequate’.

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Collective redundancy consultation trigger change

Now: Employers proposing 20+ redundancies “at one establishment” within a period of 90 days must go through a process of collective consultation before making any redundancies.

What the Bill says: The Bill removes references to "at one establishment” meaning that employers would need to count redundancies across all sites/workplaces. There is no change to the number of redundancies that will trigger collective consultation or to the principle that redundancies are counted by reference to each employer (i.e. not aggregated across a group of companies involving multiple employers).

What next: It’s not clear if there’ll be further consultation before this change takes effect. As with most measures in the Bill, it will not take effect as soon as the Bill is passed. A commencement order will be needed to put it into effect.

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Outsourcing/TUPE

Now: Ex-public sector employees and private sector employees can work on different terms and conditions following the transfer of public contract.

What the Bill says: Employees working on outsourced public contracts will be offered terms and conditions no less favourable to those who have transferred from the public sector. Similarly, any transferring workers should be treated no less favourably.

What next: Detailed regulations and a Code of Practice will be introduced relating to outsourcing public service contracts.

More generally, there will be a Call for Evidence to examine TUPE and how it is implemented in practice. This is expected in 2025.

Ban on ‘exploitative’ zero-hours contracts

Now: Zero-hour contracts are allowed but can’t include clauses preventing employees working elsewhere.

What the Bill says: The Bill does not seek to define, and ban, “exploitative” zero-hours contracts, as had been expected. This is, however, presumably the intended net effect of a range of provisions, including the introduction of a right to guaranteed hours which are covered below.

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Right to guaranteed hours

Now: No explicit right to have a more predictable working pattern.

What the Bill says: The Bill sets out detailed and complex rules which require employers to make an offer of guaranteed hours to a qualifying worker after the end of every reference period. The reference period needs to be defined in regulations, but a period of 12 weeks has been mentioned previously and is referred to in the Next Steps document.

A qualifying worker is not only someone working under a zero hours contract but also someone with a low number of guaranteed hours. What constitutes a “low” number of hours is not set out in the Bill.

The offer of guaranteed hours must reflect the hours worked during the reference period; further detail will be set out in regulations in terms of what must be offered in terms of working pattern or days. It also remains to be confirmed what prescribed form the offer must be made in and – importantly – how long it must remain open for.

There are exceptions. Addressing the possibility of short-term labour needs, the Bill provides that the offer can only be a fixed-term contract if that is reasonable. “Reasonable” could include when there is a “temporary work need”, but this needs to be defined in future regulations. This obligation also will not apply if the worker has been fairly dismissed during the qualifying period or a limited-term contract came to end (in certain circumstances).

A worker who is not offered hours on these terms can bring an employment tribunal claim, with the maximum award to be set out in regulations.

At the moment these provisions don’t apply to agency workers, but the Bill includes the power to extend its application to that group.

What next: A number of key provisions – such as the length of the reference period, exceptions to the right, potential conditions for qualification relating to regularity of hours, and what constitute a “low-hours contract” - will be set out in regulations which we assume will be subject to consultation.

Right to reasonable notice of work schedules and proportionate compensation

Now: No statutory right to notice of shifts.

What the Bill says: The Bill introduces a right to reasonable notice of a shift an employee is required to work, including the time, day and how many hours are to be worked. This duty will apply to workers employed on a zero hours or minimum hours basis, as well as workers who do not have a set working pattern.

There is also a right to reasonable notice of any change or cancelled shift. What is “reasonable” notice will depend on the circumstances, but regulations will set out a specific minimum time.

There is a duty on employers to make a payment to workers each time there is a change to a shift at short notice. Details will be clarified in regulations, but compensation will be proportionate to the cancellation or curtailment.

At the moment these provisions don’t apply to agency workers, but the Bill includes the power to extend its application to that group.

What next: There will need to be consultation on how much notice must be given, what payment must be made, how any compensation will be calculated and any exceptions.

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Stronger rights to flexible working

Now: Employees have a right to request flexible working from day 1. Employers can refuse based on one or more of the eight business reasons listed in legislation. The penalty for breaching the statutory flexible working regime is eight weeks’ pay, currently capped at £5,600.

What the Bill says: The Bill requires any refusal of a flexible working request to be reasonable, but the eight business reasons will remain the same. An employer must explain in writing what the ground for any refusal is and why their refusal is considered reasonable. There is no change to the penalty.

What next: Draft regulations may set out steps to be taken before refusing a request.

Right to switch off

Now: There is no explicit right to disconnect in UK law.

What the Bill says: Nothing. The government intend to deliver a right to switch off through a statutory Code of Practice. 

What next: Consultation on a draft Code of Practice is expected to take place in 2025.

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Gender Pay Action plans

Now: Employers with 250+ employees must publish annual gender pay gap reports. Employers are not required to publish an action plan for closing it, but many do so. The requirement is enforced by the Equality and Human Rights Commission.

What the Bill says: New regulations will to require employers with 250+ employees to publish “equality action plans” including gender pay gap action plans. The regulations will include specific penalties for not doing so.

What next: The regulations need to be drafted and we expect further consultation. The regulations will set out the detailed requirements and how often plans must be published, but this cannot be more than every 12 months. 

Gender pay gap reports to identify contract workers

Now: Employers with 250+ employees must publish annual gender pay gap reports covering their employees. Reports are based on a snapshot taken on 5 April and must be published within a year of the snapshot, i.e. by 4 April the next year.

What the Bill says: Regulations will require employers to identify the providers/employers of contract workers. This does not mean that gender pay gap data must include data reflecting what contract workers are paid. It is simply a requirement to name the providers/employers of those contract workers.

What next: Accompanying regulations are needed to extend the scope of gender pay gap reporting in this way and there may be further consultation on the details. It seems very unlikely that the rules will be in place in time for the next snapshot on 5 April 2025.

Stronger duty to prevent sexual harassment

Now: From 26 October 2024, employers must take “reasonable steps” to prevent sexual harassment of employees and workers in the course of their employment.

What the Bill says: The law would be strengthened to require employers to take “all” reasonable steps to prevent workplace harassment. The Bill gives the government powers to set out what amounts to “reasonable steps” in regulations.

What next: Further regulations will be needed setting out the reasonable steps.

Employers to be liable for harassment by third parties

Now: Employers are not explicitly/directly liable if their employees are harassed by customers/clients/other third parties.

What the Bill says: The Bill would make employers liable for third party harassment unless the employer took all reasonably practicable steps to prevent this. This covers all types of harassment not just sexual harassment.

What next: It’s not clear what additional consultation there will be on this measure before it comes into effect.

Disclosure of sexual harassment to be regarded as protected disclosure

Now: Employees who disclose a breach of health and safety obligations or other breach of the law are protected as whistleblowers if they reasonably believe the disclosure is in the public interest. Sexual harassment complaints can already be protected disclosures where they meet the public interest test and count as a breach of health and safety obligations or breach of a legal obligation.

What the Bill says: The Bill would add disclosing sexual harassment to the list of what counts as a protected disclosure, making it more explicit that this can amount to whistleblowing – as long as it meets the public interest disclosure test.

What next: It’s not clear what additional consultation there will be on this measure before it comes into effect.

Ban on dual discrimination

Now: The Equality Act 2010 already contains a provision about dual discrimination (called “combined discrimination”) but it has never been brought into force. This provides that it is direct discrimination to treat a person less favourably because of a combination of 2 protected characteristics.

What the Bill says: Nothing. Labour had previously said it would it would enact this provision against dual discrimination but it has not found its way into the Employment Rights Bill.

What next: This could still be implemented as part of Labour’s future reform plans, but it may have been shelved.

Read more:

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Ethnicity pay gap reporting

Now: Ethnicity pay gap reporting is not compulsory, although there is government guidance for employers who choose to report voluntarily.

What the Bill says: The Employment Rights Bill doesn’t deal with ethnicity pay gap reporting but the government plans to introduce this under a separate Bill.

What next: The government’s Next Steps document says that it will be consulting on this additional legislation in due course, “with a draft Bill to be published during this parliamentary session for pre-legislative scrutiny.”

Disability pay gap reporting

Now: Disability pay gap reporting is not compulsory.

What the Bill says: The Employment Rights Bill doesn’t deal with disability pay gap reporting but the government plans to introduce this under a separate Bill.

What next: The government’s Next Steps document says that it will be consulting on this additional legislation in due course, “with a draft Bill to be published during this parliamentary session for pre-legislative scrutiny.”

Extension of equal pay rights

Now: Equal pay claims made under the equal pay regime are currently limited to differences in pay based on sex. Claims about pay based on other protected characteristics have to be brought under discrimination law.

What the Bill says: The Bill doesn’t deal with extending the equal pay rights regime but the government plans to introduce this under a separate Bill.  It is clear the government remains committed to extend the equal pay regime allowing workers to bring equal pay claims on the basis of race or disability.

What next: The government’s Next Steps document says that it will be consulting on this additional legislation in due course, “with a draft Bill to be published during this parliamentary session for pre-legislative scrutiny.”

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Equal Pay enforcement unit

Now: Equal pay claims are brought by individuals, albeit often acting in groups.

What the Bill says: The government’s Next Steps document confirms that it will create a new regulatory enforcement unit for equal pay.

What next: This seems likely to be dealt with in separate legislation.

Right of trade union access

Now: There is no general right for trade unions to access workplaces for recruitment and organisation of members – exceptionally unions can currently only come onto an employer’s premises if the employer agrees (for example as part of a collective agreement where the union is already recognised) or it is ordered by the Central Arbitration Committee ahead of a statutory recognition ballot.

What the Bill says: The Bill would give trade union officials a wider right to access workplaces for recruitment, organising (not including organising industrial action) and collective bargaining purposes, subject to following a prescriptive statutory process. Unions would gain a right to request access: in response, employers could either choose to negotiate the terms of legally enforceable “access agreements” or the union would be able to apply to the Central Arbitration Committee for it to order access, with a presumption that union officials should be able to access a workplace in any manner that does not unreasonably interfere with the employer’s business. The default terms for access arrangements (where the parties are unable to reach agreement through negotiation) will be prescribed in future regulations.

If an employer fails to comply, the CAC would have powers to order the employer to take steps to enable access to the workplace by union officials and to impose financial penalties.

Notably, the Bill indicates that access will mean physical entry to an employer’s premises (and does not deal with so-called ‘digital rights of access’ which are another long-standing demand of the UK trade union movement.)

What next: Once the Bill has passed, the government will be required to publish secondary legislation setting out in detail the statutory process for requesting access, the grounds on which the Central Arbitration Committee would be able to refuse requests for access and the default access arrangements which the Central Arbitration Committee may impose. The government has also promised to work with stakeholders to ensure an effective enforcement regime for unions’ new rights of access.

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Reforms to statutory union recognition

Now: The recognition process is complex - to commence an application for statutory recognition, a union must show that at least 10% of a proposed bargaining unit are union members and that the majority of them are likely to support recognition. The CAC can only then order recognition if, either (i) at least 50% of the bargaining unit are union members or (ii) a ballot is held, in which a majority of votes cast are in favour and at least 40% of all workers in the bargaining unit vote for recognition.

What the Bill says: The Bill would meaningfully lower the hurdles of the process by removing the 40% threshold and the initial requirement to show majority support is likely. The Bill would also give the government the power to reduce the required threshold for union membership to as low as 2% of the proposed bargaining unit through future secondary legislation.

What next: The government will consult on additional provisions to strengthen the existing restrictions on unfair practices during trade union recognition processes.

Read more:

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Collective grievance process

Now: There is no legal requirement on employers to adopt a procedure for collective grievances. Employees can raise individual grievances, and have a statutory right to be accompanied by a trade union representative at an individual grievance hearing.

What the Bill says: There is nothing on collective grievances in the Bill. However, the government have confirmed that this is one of their longer-term delivery reforms, taking longer to undertake and implement. The government will consult with ACAS to allow employees to collectively raise grievances about conduct in the workplace.

What next: The government plan to start consultations in 2025.

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Obligation to notify workers of their right to join a trade union

Now: Employers must give all workers a written statement of employment particulars when they start work: among other prescribed information, these must state whether there is a collective agreement which affects their terms and conditions of employment. The penalties for not doing so are limited (two to four week’s pay capped at £2,800).

What the Bill says: The Bill would expand the list of required particulars that employers must give to their employees to include an explicit statement that workers have the right to join a trade union. The specific content and form of this statement and the obligations placed on employers in terms of when and how it should be provided will be set out in future secondary legislation.

What next: This is not among the provisions with a specified commencement date. This will depend on the relevant regulations. 

Repeal of Strikes (Minimum Service Levels) Act 2023 and Trade Union Act 2016 and permission for electronic balloting

Now: The Strikes (Minimum Service Levels) Act 2023 gives the government powers to set minimum service levels during strikes in essential services.

The Trade Union Act 2016 imposed various limitations on strikes, including longer notice periods, restrictions on picketing, higher ballot thresholds for certain important public services and the expiry of industrial action mandates after six months.

Industrial action balloting must be done in secret by post.

What the Bill says: The Bill would repeal the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016, rolling back almost all of the restrictions on calling strike action introduced by Conservative-led governments since 2010.

What next: The Strikes (Minimum Service Levels) Act will be repealed as soon as the Bill is passed, whereas the relevant provisions of the Trade Union Act will be repealed two months later, without further consultation. The government is launching a working group with stakeholders on the introduction of electronic balloting for industrial action and is likely to introduce new secondary legislation to bring this in next year.

The government will also consult on measures to ‘simplify’ the information which unions must provide to employers in notices of industrial action, and may amend the Bill to include provisions in this area at a later stage.

New protections for trade union reps and members

Now: Employees cannot be subjected to detrimental treatment or dismissal because of their trade union membership or activities; however, the Supreme Court recently confirmed in Mercer that there is no protection from detriments short of dismissal for taking part in industrial action. It’s also unlawful to refuse to employ someone on grounds relating to trade union membership or to compile a ‘blacklist’ of union members and representatives.

What the Bill says: The Bill would introduce new protection for workers against detriments short of dismissal for taking part in protected industrial action, correcting the gap in existing protection confirmed in the Mercer decision. It also strengthens and simplifies the existing protection against being dismissed for taking part in protected industrial action.

The Bill would introduce a new statutory role for “union equality representatives” in workplaces with recognised unions. Their duties would include promoting equality in the workplace, providing advice and support to union members on equality matters, and consulting with the employer on equality matters. They would have a right to paid time off to carry out these duties.

The Bill would also increase the existing rights of representatives of recognised unions, requiring employers to provide them with reasonable facilities and accommodations to carry out their duties, in addition to their existing right to paid time off.

The Bill would extend existing protections against blacklisting, to cover discriminatory actions by bodies other than employers or employment agencies.

What next: This is not among the provisions with a specified commencement date.

Fair Pay Agreement in adult social care

Now: Pay and other terms and conditions in the social care sector are set by individual employers and are only collectively bargained with trade unions where they are recognised by particular employers.

What the Bill says: The Bill would give the Government new powers to establish the Adult Social Care Negotiating Body, an industry-wide body composed of representatives of employers and unions in the social care sector. The Secretary of State would be able to ‘ratify’ agreements reached within the Negotiating Body relating to the terms and conditions of all staff employed in the provision of adult social care in England, in which case they would become binding on all employers in the sector. They could also set pay directly in the event of a failure to reach an agreement within the Negotiating Body.

What next: The government will consult on its proposals for ‘Fair Pay Agreements’ in the adult social care sector. Once the Bill is passed, it will publish regulations and codes of practice governing the operation of the Adult Social Care Negotiating Body in greater detail.

Surveillance technologies - negotiations with trade unions and staff representatives

Now: There are no specific statutory provisions on consulting with staff or unions about surveillance technology.

What the Bill says: Not mentioned in the Bill – only referred to in Next Steps document.

What next: The Next Steps document indicates that there will be a consultation on workplace surveillance technologies and associated union and staff consultation provisions. It remains to be seen how this may tie into any future reforms on the regulation of artificial intelligence.

Protection for maternity returners

Now: In redundancy situations, women have the right to be offered suitable alternative employment (if available) once they inform their employer of their pregnancy or if their expected date of childbirth was less than 18 months ago.

What the Bill says: The Bill would give the government powers to introduce regulations to cover other dismissals (which are not redundancies) taking place during pregnancy, maternity leave or following a return to work. The Bill is clear that the protection will also apply to other forms of family leave such as adoption leave, shared parental leave, neonatal care leave and bereaved partners’ paternity leave. It is unclear what the regulations will state but the explanatory notes to the Bill state this will ban dismissals of women who are pregnant, on maternity leave, and during a six month return to work period, except in specific circumstances.

What next: We await further detail in regulations.

Right to bereavement leave

Now: There’s no general statutory right to bereavement leave unless an employee’s child dies under the age of 18/ is stillborn after 24 weeks of pregnancy whereby statutory parental bereavement leave and pay may apply. There is also a right to unpaid reasonable time off for family and dependants in an emergency.

What the Bill says: The Bill will give the government the power to introduce a day 1 right to at least one week of bereavement leave for employees. Regulations will specify the necessary relationship with the deceased in order to qualify but we assume this is likely to follow the definition used in time off for dependants.

What next: Further regulations are required to set out the precise detail of this right. 

Day 1 parental leave

Now: Employees need to have been employed for one year to be eligible for parental leave.

What the Bill says: The Bill would remove any length of service requirement for parental leave.

What next: This will become law in a date set by further regulations.

Paternity leave changes

Length of service

Now: Eligibility for statutory paternity leave requires employees to have been employed for 26 weeks, assessed 15 weeks before the expected birth week.

What the Bill says: The Bill would remove any length of service requirement for paternity leave.

What next: This will become law in a date set by further regulations.

Interplay with shared parental leave

Now: Employees lose any entitlement to paternity leave and pay if they take shared parental leave and pay before exhausting their paternity leave entitlements.

What the Bill says: Employees will now be able to take paternity leave and pay even after they have taken shared parental leave and pay.

What next: This will become law in a date set by further regulations.

Parental leave/ carer’s leave review

Now: The government have said that the current parental leave system does not support working parents.

What the Bill says: Nothing in the Bill (aside from making parental leave a day one right) but the government has confirmed it will conduct a full review of the parental leave system as well as reviewing the benefits of introducing paid carers’ leave.

What next: The government has confirmed that the reviews are one of their longer-term delivery reforms. We expect any reviews to take place in 2025 and beyond.

Menopause action plans

Now: There are no proactive obligations for employers to take steps relating to employees with menopause.

What the Bill says: New regulations will require employers with 250+ employees to produce and publish menopause action plans. The regulations will include specific penalties for not doing so.

What next: The regulations need to be drafted and we expect further consultation. The regulations will set out the detailed requirements and how often plans must be published, but this cannot be more than every 12 months.

Statutory sick pay reforms

Now: Statutory sick pay is payable from day four of sickness, and employees need to be earning above the lower earnings limit £123 to qualify.

What the Bill says: SSP will become payable from day 1 of sickness and payable for the first 3 Qualifying Days of sickness. In addition, the lower earnings limit will be removed, meaning that all eligible employees, regardless of earnings, will be entitled to SSP.

What next: A consultation will be held to determine the appropriate percentage replacement rate for individuals earning below the current flat rate of SSP. This adjustment will be introduced via an amendment as the Bill progresses.

New single status of worker

Now: There is a 3-tier system for employment status: people are either self-employed, workers or employees.

What the Bill says: Nothing. The Next Steps document discusses plans to move to a two-tier system, removing the distinction between ‘employees’ and ‘workers’. This is not part of the Bill.

What next: This needs further consultation – expected to begin during 2025 at the earliest.

National Living Wage

Now: The National Living Wage increases in April each year. The rate is set by the government, based on recommendations made by the Low Pay Commission. The NLW does not apply to under 21s. There is a lower hourly minimum wage for 18-20 year olds.

What the Bill says: Nothing - the NLW is not dealt with in the Bill. However, the government has already asked the Low Pay Commission to take account of the cost of living when recommending the NLW for April 2025 and to narrow the gap between the NLW and the 18-20 year old minimum wage rates.

What next: The Low Pay Commission will make recommendations in Autumn 2024 for the April 2025 rates.

Ban on unpaid internships

Now: Status of interns can be a grey area. There is no legal definition of “internship” or “work experience” and an individual’s employment status will determine what pay they are entitled to and what rights they have.

What the Bill says: Nothing. But the government remain committed to banning unpaid internships and a Call for Evidence will be launched.

What next: The Call for Evidence is expected by the end of the year.

Read more:

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Extension of time limits for bringing tribunal claims

Now: Most tribunal claims need to be brought within three months of the act complained of (e.g. dismissal, discrimination, deduction from wages).

What the Bill says: Nothing.

What next: Measures to extend the time limit for bringing Employment Tribunal claims will be added by amendment – we're not sure when. A 6-month time limit has previously been mentioned.

Creation of Fair Work Agency

Now: The UK has limited state enforcement of employment rights.

What the Bill says:  The Bill gives the government various powers to enforce labour market regulation and to delegate this to a new public authority (expected to be called the Fair Work Agency). The Next Steps document says that the Fair Work Agency will bring together existing enforcement functions, including minimum wage and statutory sick pay enforcement; the employment tribunal penalty scheme; labour exploitation and modern slavery; as well as introducing the enforcement of holiday pay policy. The Bill sets out a range of enforcement powers, including powers to enter business premises to obtain documents.

What next: It’s likely to take a number of years for the practical arrangements for the Fair Work Agency to be fully up and running