What Do Businesses Need To Know About The New Employment Rights Bill

On Tue, Oct 17, 2023, the UK government passed the Employment Rights Bill, aiming to reform national employment laws. The bill is part of the Labour government's initiative to enhance job security, ensure equitable pay, and support working individuals while facilitating business growth.

The bill awaits Royal Assent before becoming law, and businesses are advised to prepare for its implementation in the coming months.

Overview of the Employment Rights Bill

The Employment Rights Bill seeks to update UK employment laws and provide enhanced employee protections. Key objectives include:

Increasing secure working rights for employees Protecting employees from unfair dismissal, improving sickness pay, and enhancing family leave Modernizing trade union laws Outlining enforcement mechanisms for the bill

These changes may not significantly impact businesses that already adhere to similar policies, but others may need to develop new compliance strategies.

Having passed through Parliament, the bill requires Royal Assent, anticipated soon. The government plans to provide official guidance throughout 2026 to assist businesses in understanding and adhering to the new rules.

The qualifying period for claiming unfair dismissal will reduce from two years to six months, likely effective in early 2027.

Starting Oct 2026, employers cannot dismiss and rehire staff on less favorable terms unless no alternative exists. This prevents contract changes through dismissal threats, except in extreme cases.

From 2027, zero-hours contract workers will:

Request guaranteed hours Receive advance notice of shifts Be compensated for short-notice shift cancellations or reductions

Statutory Sick Pay will be available from the first sick day, eliminating the current four-day waiting period. All employees, regardless of salary, will qualify.

Day-one rights for paternity and unpaid parental leave will be established, with stronger protections for pregnant employees and those returning from maternity leave.

Rejections of flexible working requests must be justified with valid reasons, enhancing employee rights to alternative working hours.

Employers will be required to take proactive measures against sexual harassment and may be held accountable for client or customer harassment. Sexual harassment claims will also receive whistleblower protection.

Organizations with 250 or more employees must publish Equality Action Plans detailing efforts to reduce the gender pay gap and support menopausal employees.

Trade unions will gain increased authority, including shorter strike notice periods, simplified voting processes, and employer obligations to inform staff of their right to union membership.

In April 2026, the government will establish a Fair Work Agency to investigate businesses, impose penalties, and enforce employee rights under the new law.

The government asserts that the bill will boost productivity, reduce turnover, and enhance worker rights. Employers are encouraged to prepare for these changes, which may already be standard in some workplaces. Early preparation is advisable to ensure compliance.

Based on reporting by techround.co.uk.