In September 2021, the Labour Party first introduced its vision for ‘a new deal for working people’. It’s been through a few iterations since then, but it was reintroduced as ‘Labour’s Plan to make work pay: Delivering a new deal for working people’ as part of its election manifesto, with the promise that it would be implemented within the first 100 days of a Labour government.
Making good on its promise on 10th October 2024, the government published the new Employment Rights Bill 2024. This broad new piece of legislation strengthens several existing working rights and policies as well as introducing new ones.
The Bill brings forward 28 individual employment reforms. Here we explore the key changes and what they mean for both employees and employers.
1. A ban on zero-hours contracts
The aim is to provide workers with more predictable and stable employment contracts. The Bill sets out that workers should be offered a guaranteed hours contract at the end of a reference period, and that the guaranteed hours should reflect the hours the worker has worked during that period. Workers should also be entitled to reasonable notice of any changes to their shifts or working time, and proportionate compensation for cancelled shifts.
2. A ban on Fire and Rehire Practices
The bill will significantly restrict employers’ ability to use fire and rehire practices. It amends the law on unfair dismissal so that, where employees are dismissed for failing to agree to a change in their contract of employment, those dismissals will be treated as automatically unfair, unless the employer can show evidence that the need to change the contractual terms was “unavoidable”. This change, whilst protecting employees from the unscrupulous use of these practices, leaves employers open to increased legal risk.
3. Removal of the two-year qualifying period for unfair dismissal claims
Under the Bill this will become a ‘day one’ right. It removes the two-year qualifying period and replaces it with a new ‘initial period of employment’ (or ‘probationary period’) during which the employer can dismiss an employee for certain reasons, subject to following a specified procedure.
4. Statutory Sick Pay to become a right from day one
The Bill reinforces Labour’s manifesto commitment to removing the qualifying period for statutory sick pay, making it also a ‘day one’ right, as well as removing the lower earnings limit.
5. New protections for parents
Parental leave will become a day one right (rather than parents having to have worked continuously for an employer for 12 months). The Bill also strengthens maternity leave protections making it unlawful, except in very specified circumstances, to dismiss a woman for six months after she returns to work. An employee may take paternity leave to support a mother or adopter taking care of a new child, subject to having at least 26 weeks’ qualifying employment. Parental bereavement leave will automatically become a day one right for all.
6. Default flexible working
The Bill aims to make flexible working the “default” for all employees from day one. This means that employers will only be able to refuse an employee the right to work flexibly if they can prove it is unreasonable. This new legislation could prove tricky for some organisations, and there is certainly no one size fits all approach to flexible working so it will be interesting to see how this works out in practice. Employers need to get prepared and review what types of flexible working arrangement may be appropriate for them and their employees.
7. Building more equitable and fairer workplaces
The Bill will require large employers to publish equality action plans showing the steps they are taking in relation gender equality, including how they’re addressing the gender pay gap and supporting employees going through the menopause. The Bill will also establish a new Fair Work Agency to enforce rights such as holiday pay and statutory sick pay.
8. Strikes and industrial action
The Bill repeals the Strikes Act. The period of notice to be given to an employer to notify it of industrial action is to be reduced from 14 days to 7 days. The bill will repeal restrictions on trade union recognition and strike action. It will also introduce electronic balloting, a new right of access for trade unions to workplaces, and a requirement for employers to notify workers of their right to join a trade union.
Whilst we may have to wait until autumn 2026 for these changes to come into effect under a phased rollout, it’s vital that businesses stay engaged with the consultation process and closely monitor the bill’s progress through parliament.
It would be wise to get ahead and consider what changes your business may need to make to its people practices, policies, and procedures.
Leverets can help by supporting your business in reviewing, updating, and implementing policies will help businesses adapt to these changes efficiently, safeguarding compliance, reducing legal risk, and protecting employee well-being considering this broad new legislation.
Get in touch with a member of our specialist team today.
