Following its General Election win, Labour introduced a significant suite of reforms in its Employment Rights Bill (ERB) which could significantly change employment law in GB. The proposed reforms were publicised towards the end of 2024, therefore we have provided a reminder of some of the most notable provisions of the new ERB as follows:
· “Day one” unfair dismissal rights: A significant change is the introduction of “day one” unfair dismissal rights for employees. The law currently states that employees in GB must be employed for two years (one year in Northern Ireland) to be able to accrue unfair dismissal rights. The new qualifying period will permit eligible employees to challenge alleged unfair dismissals from the first day of their employment. This development marks a considerable change, however it will not be implemented immediately. The Government has stated that changes in respect of unfair dismissal will not take effect until at least than autumn of 2026. This will afford employers time to prepare for the change, with the current two-year qualifying period remaining in place until then. In addition to unfair dismissal, the ERB will introduce other “day one” rights, including extended rights to statutory sick pay (SSP), unpaid parental and paternity leave, a right to paid bereavement leave, and enhanced maternity protection.
· Restrictions on zero-hours contracts: The ERB will limit the use of zero-hours contracts, whereby employers will be required to offer guaranteed hours to workers on zero-hour contracts and those on “low” guaranteed hours but regularly work in excess of said hours. Such workers will also be compensated for shifts which end early or are cancelled.
· “Fire and Rehire” restrictions: The ERB proposes reform in respect of how employers handle employment contract variations through “fire and rehire”. Specifically, it will be rendered automatically unfair to dismiss an employee for the following reasons: (1) if an employer attempts to vary the contract without the employee’s consent, or (2) if an employer re-engages an employee or hires another under a new employment contract to perform substantially the same duties.
· Harassment: The ERB introduces further changes to the updated workplace harassment laws which came into effect in October 2024. In short, employers will be required to take all reasonable steps to prevent sexual harassment. Among other things, disclosures in respect of sexual harassment will also be classified as “protected disclosures”, granting whistleblowing protection to those who report such conduct.
· Changes to flexible working: The ERB outlines new provisions for flexible working, meaning employers can only refuse requests if they have a “reasonable” basis to do so. Employers will also be obliged to state the specific grounds for refusal and explain why the refusal is reasonable.
Current status of the ERB
The ERB is currently at “committee stage” in the House of Commons and is expected to become law in the summer of 2025. Once the legislation is passed, further regulations will be required to implement each reform. As alluded in the section regarding “day one” unfair dismissal rights above, the impact of the ERB could be limited in 2025, with major change expected in 2026.
How will the ERB impact Northern Ireland?
Employment Law in Northern Ireland (NI) is devolved, therefore the Good Jobs Employment Rights Bill Consultation followed the return of the NI Assembly in early 2024. The Department for Economy is currently considering responses to the consultation. There are similarities to GB’s proposals, however
GB will likely influence policy and direction in NI. These considerable changes in employment law highlight the importance of remaining informed and preparing for future developments.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
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Article Written By Aaron Mullen – Associate Director in our Employment Law and Litigation Team