Employment Rights Bill – What it Means for Employers
Since the introduction of the Employment Rights Bill in October 2024 several significant amendments have been introduced during the Bill’s progress through Parliament. The Bill intends to reform employment law with a view to giving workers more security and stability within their employment. This article summarises the proposed key changes to employment law.
Day One Rights
Currently employees require a minimum period of 2 years’ continuous service before acquiring the right not to be unfairly dismissed.
The Bill proposes removing the requirement for employees to have 2 years’ continuous service and therefore provides employees with the right not to be unfairly dismissed from day one of employment.
The introduction of day one rights is expected to be accompanied by regulations which allow dismissal during an ‘initial period’ where the reason for dismissal is based on capability, conduct or some other substantial reason excluding redundancy.
The Bill also proposes a day one right for the following types of leave and statutory pay:
- Bereavement leave
- Parental leave
- Maternity pay
- Paternity pay
- Sick pay
Family Friendly Rights
The Bill proposes stronger protections for pregnant women and new mothers. The Bill proposes making it unlawful to dismiss a woman during their pregnancy or maternity leave or within 6 months of returning from maternity leave. Such protection will also apply to adoption leave and shared parental leave.
It is expected the Bill will provide specific circumstances to allow for exceptions to the above rights.
Pay and Annual Leave Records
The Bill introduces a new obligation on employers to keep records of employees’ annual leave and pay for 6 years. Failing to comply with this obligation will be a criminal offence and will see employers being punished with fines.
Banning Zero-Hour Contracts
Currently zero-hours contracts are lawful as long as they do not include clauses restricting employees from working elsewhere.
The Bill intends to restrict the use of zero-hours contracts by proposing a right to guaranteed hours, reasonable notice of a shift, and payment for cancellation or change of a shift. However, amendments have been made to the Bill allowing the right to contract out of these rights by collective agreement between the employer and a trade union.
Ending ‘Fire and Re-Hire’
The Statutory Code of Practice on fire and re-hire was published in July 2024. The Code of Practice sets out a procedure to follow when considering implementing a change of contract by dismissing the employee and re-hiring them on new contractual terms.
The practice of firing and re-hiring is currently lawful but should only be used as a ‘last resort’.
The Bill proposes restricting the practice of fire and re-hire by making dismissal on the grounds of the employee rejecting varied terms of employment an automatically unfair dismissal.
Duty to Prevent Sexual Harassment & Liability for Harassment by Third Parties
Employers are currently limited to take ‘reasonable steps’ in preventing sexual harassment in the workplace.
The Bill seeks to strengthen the employer’s duty to take ‘all reasonable steps’. Regulations will be published to define what amounts to ‘all reasonable steps’.
Furthermore, the Bill proposes a duty on employers to prevent all types of harassment, not solely sexual harassment, by a third party such as customers and clients. Employers will need to take all reasonable steps to prevent third party harassment of their employees.
The Bill also proposes making a disclosure of sexual harassment a qualifying disclosure amounting to whistleblowing and therefore protecting employees who disclose incidents of sexual harassment.
Collective Redundancy
Employers are currently obliged to collectively consult when dismissing 20 or more employees as redundant within a period of 90 days or less at one establishment. This means that organisations with a number of establishments can currently seek to dismiss by way of redundancy 20 or more employees across the whole organisation at multi-sites without collectively consulting with employee representatives.
The Bill proposes removing the wording ‘at one establishment’ and extending the duty to collectively consult when the threshold number of employees are being dismissed across the ‘whole organisation’.
The ‘threshold number’ of employees is yet to be determined.
Trade Union Recognition & Rights
The Bill proposes lowering the threshold for union membership to allow unions to apply for statutory recognition.
It also proposes widening trade union officials’ rights to access the workplace. Currently union officials have no right to access the workplace without the employer’s consent.
In addition to representatives of unions having the right to paid time off, the Bill proposes increased rights to be provided with reasonable facilities to carry out their duties.
Furthermore, the Bill proposes an obligation on the employer to explicitly state within their written particulars of employment that employees have the right to join a trade union.
Extending Limitation of Employment Tribunal Claims
Currently claims to the Employment Tribunal must be brought within 3 months of the date of dismissal or problem complained of.
The Bill proposes extending the time limit from 3 months to 6 months.
What Happens Next?
As at 29 April 2025 the Bill is at the House of Lords Committee stage. Once the Committee stage is finished, the Bill will return to the House of Commons for its Report stage.
The House of Commons will debate the Bill as amended by the House of Lords and may propose further amendments.
Once the Bill is agreed between both the House of Commons and the House of Lords it will be ready to receive Royal Assent and become enacted into law.
For further advice and assistance in employment law matters please contact Natalie Peacock at natalie.peacock@rogers-norton.co.uk or phone 01603 675674
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*This article is provided for general information purposes only and does not constitute legal or any other professional advice.