Understanding The Employment Rights Bill: A New Era For Employers, Employees And Workers (Video)

Introduction

The landscape of employment law in the UK is undergoing a significant transformation. The proposedEmployment Rights Billsignals a bold shift towards greater protections for workers, improved job security, and more predictable working arrangements. Simultaneously, it introduces new legal obligations that employers must swiftly understand and prepare for.

Designed to modernise workplace rights in a post-pandemic economy, the Bill addresses long-standing issues such as zero-hours contracts, dismissal rights, and flexible working arrangements. For employers and employees alike, this marks a pivotal moment that will shape workplace practices for years to come.

What is the employment rights bill?

TheEmployment Rights Billis a comprehensive piece of draft legislation currently progressing through Parliament. It aims to overhaul key aspects of employment law in England and Wales, addressing modern workplace realities and longstanding concerns about fairness, predictability, and enforcement.

The Bill is part of the Governments "Plan to Make Work Pay" to grow the economy and raise living standards, it introduces a wide range of reforms applicable to employers of all sizes and across all sectors. It particularly seeks to strengthen rights for workers, including those in agency roles. From new "Day One" rights for flexible working to a statutory framework for guaranteed hours contracts, the Bill is poised to significantly reshape the balance of rights and responsibilities in the workplace.

Although not yet law, the Employment Rights Bill is expected to come into force in stages beginning later this year.

What are the key changes proposed in the employment rights bill?

1. Unfair Dismissal Protections

One of the most significant reforms is the removal of the qualifying period for certain unfair dismissal claims. Currently, employees need to have at least two years' continuous service to bring most unfair dismissal claims. Under the new proposals, some protections will apply from the first day of employment, particularly where dismissals relate to working hours, flexibility, or whistleblowing,this new 'day one right' is subject to specific exemptions that are expected to be clarified in secondary legislation.

While employees will have a day-one protection against unfair dismissal, the Bill also introduces a statutory "initial period of employment," such as a probation period, during which a 'lighter touch procedure' dismissal process can be followed by the employer for reasons such as conduct, capability, statutory restriction, or some other substantial reason (SOSR).However, this lighter-touch procedure does not apply to dismissals for redundancy, which will still require adherence to standard unfair dismissal principles. The government has expressed that this new statutory "initial period" may be nine months but will later be confirmed in the amendments to the Bill as well as a separate consultation.

Additionally, the list of automatically unfair reasons for dismissal is being expanded. This means employers will need to be much more careful when terminating employment, especially in the early stage of an employee's tenure. Probationary procedures, contract terms, and dismissal processes will all require review and careful revision.

2. Guaranteed Hours Contracts

In a move to tackle the insecurity of zero-hours arrangements, the Bill introduces a legal framework for "guaranteed hours contracts." These contracts will set out a minimum number of working hours that an employer must offer, creating more predictability and financial stability for workers.

Employers who fail to offer these guaranteed hours to eligible workers may face claims and/or paying compensation based on financial loss. This change is especially significant in industries that rely heavily on casual or variable work patterns, such as retail, hospitality, and logistics.

3. Right to request flexible working from day one

The Bill proposes aDay Oneright to request flexible working, replacing the existing 26-week qualifying period.

Comparison Table: Current vs Proposed Law

Implications for employers:

• Need for updated flexible working policies
• Shorter response timelines
• Requirement to document legitimate business grounds for refusal
• Reviewing what forms of flexible working arrangements suit the organisation
• Providing updated training for managers dealing with the requests

4. Leave Enhancements

The Bill includes several new measures designed to support employees with caring responsibilities.

Changes are proposed to improve the accessibility and flexibility of paternity, bereavement, unpaid parental, and neonatal care leave. For both Paternity and parental leave, the service requirement will be eliminated, this will allow employees effectively from day one of their employment, to take two weeks of paternity leave within the first year after their child's birth or adoption. Similarly, for unpaid parental leave, all employees can take up to 18 weeks of unpaid parental leave per child, with no more than four weeks in any given year. The Bill will further permit paternity leave to be taken after taking shared parental leave, encapsulating how the Bill will begin to reflect the evolving societal attitudes towards gender equality, shared parental responsibility and work-life balance.

Additionally, as well as the standard paternity and maternity leave, employees with babies admitted to neonatal care within the first 28 days of life and requiring at least a minimum of a seven-day stay in hospital will have the legal right to up to 12 weeks of paid leave from day one of employment. Signifying the hope and relief of many employees, as navigating this difficult period will no longer eat into their maternity, paternity, or shared parental leave.

Furthermore, the legislation establishes a day one right to protected time off to grieve the loss of a loved one, permitting a minimum of at least one week of paid leave, bereavement leave must be taken within 56 days after the individual's death. The Employee's eligibility will be based on their relationship with the deceased, the scope of which will be defined in secondary legislation. Employers must understand that they will not be able to penalise employees in relation to detriment or dismissal relating to this absence, which grants enhanced protection for employees offering job security during a trying period.

Employers will consequently need to review their leave policies and employee handbooks to ensure these new entitlements are clearly communicated and lawfully implemented.

5. Protections for Agency Workers

The Employment Rights Bill also places a strong emphasis on safeguarding the rights of workers in precarious or non-standard employment relationships. This includes Agency workers, zero-hours, and part-time workers as well as freelancers.

Proposals include:

• The offer of guaranteed hours contracts
• Protection from day one against unfair dismissal
• Reasonable notice of changes and cancellations to shifts by both agencies and end clients
• Greater pay transparency (including payment for short notice shift changes) from agencies
• The creation of aSingle Enforcement Body,referred to astheFair Work Agency,is also being explored, with the aim of consolidating enforcement powers and providing a streamlined approach to investigating breaches of employment law.

6. Enhanced Employment Tribunal Powers

To support compliance and strengthen enforcement, the Bill seeks to enhance the powers of Employment Tribunals. This includes:

• Increased time limits for all claims to six months
• Increase compensation limits
• Broader authority to make enforcement orders
• The ability to award aggravated damages in cases of egregious conduct

Employers that fail to align their practices with the new legal standards could face costly litigation, reputational harm, and significant financial penalties.

What does this mean for employers?

For employers, the Employment Rights Bill represents both a challenge and an opportunity. On one hand, it introduces new legal risks that require careful planning and policy updates. On the other, it presents a chance to build more transparent, inclusive, and equitable workplaces.

Key employer considerations include:

• The need to update employment contracts, policies, and handbooks to reflect new rights
• Reviewing flexible working procedures and dismissal protocols
• Preparing for additional costs and obligations arising from guaranteed hours and carer leave
• Training HR and management teams on the new legal framework

Certain industries, such as retail, hospitality, transport, and logistics, will be particularly affected due to their reliance on part-time, shift-based, or flexible staff.

What does this mean for employees and workers?

It empowers individuals with greater job security, improved work-life balance, and more accessible legal rights. Workers in previously under protected roles, such as agency and gig workers, stand to benefit significantly with these more transparent changes.

Key improvements include:

• Day One protection from unfair dismissal in specific circumstances
• More consistent working hours and protections against unpredictability
• Immediate access to request flexible working
• Additional support for carers and parents

Employees should familiarise themselves with their rights and speak with a legal adviser if they believe their employer is not meeting the new standards once enacted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.