Employment Rights Bill: Update

What Businesses Need to Know

The UK’s Employment Rights Bill, introduced in October 2024, is now progressing through Parliament. It is expected to recent Royal Assent by mid-2025 and become law in 2026.

While the overarching goals of the Bill are clear and it is on track to become law, its final form and the specifics of its implementation are still being shaped and the exact obligations for employers will be clarified as details are finalised.  In the meantime, we would urge all employers to monitor the progress of the Bill and participate in consultations where possible to ensure their interests are considered. Understanding these changes now will help you prepare and adapt your operations accordingly.

Summary of Key Changes that will Affect Employers

In the following sections, we set out a summary of what we already know and the implications for companies that employ staff.

1. Day-One Protection Against Unfair Dismissal
   • What’s Changing: Employees will gain protection against unfair dismissal from their first day of employment, removing the previous two-year qualifying period.
   • Implications: Employers will need to ensure that all dismissal procedures, including those during probation, are fair, well-documented, and based on clear, objective facts about performance.
2. Reform of Zero-Hours Contracts
   • What’s Changing:  There have been speculations that Zero Hours contracts will become unlawful and this has created panic across some sectors.  Whilst the Government has been clear that it wants to remove ‘exploitative zero hours contracts’, this does not mean they will cease to exist in any form once the Bill becomes law.  What we do know is that workers who have regular working patterns over a 12-week period will be able to request a contract reflecting their actual hours. Additionally, employers must provide reasonable notice for shift cancellations or compensate affected workers.
   • Implications: This will affect how you manage flexible staffing, requiring more structured scheduling and potential adjustments to contract types.
3. Right to Request Flexible Working from Day One
   • What’s Changing: Employees will have the right to request flexible working arrangements from their first day of employment. This does not mean that employers will have to agree to every request, but they must consider the requests seriously and reasonably and respond within a specified timeframe.
   • Implications: While roles in hospitality often require fixed schedules, employers will need to assess each request individually, maintain documentation carefully and provide valid business reasons for any refusals.
4. Extended Timeframe for Employment Tribunal Claims
   • What’s Changing: The period for bringing most employment tribunal claims against employers will extend from three months to six months.
   • Implications: This increases the window during which former employees can raise disputes and make claims to the Employment Tribunal, emphasising the need for effective record-keeping and adherence to fair employment practices.
5. Ban on ‘Fire and Rehire’ Practices
   • What’s Changing: Employers will be prohibited from dismissing employees and rehiring them on less favourable terms unless it is a genuine last resort to prevent business failure.
   • Implications: Any restructuring of contracts must involve genuine consultation and exploration of alternatives before considering termination and re-engagement.

What Should you do to Prepare Your Business?

There is no need for businesses to panic, but if you do employ staff you are advised to prepare for the changes that the new legislation will bring over the forthcoming months.

• Stay informed:  Subscribe to updates from reliable sources like Gov.UK, ACAS or a trusted HR adviser.  Contact NCASS HR Partner [email protected] to sign up to their regular newsletter or for a free initial consultation to discuss any particular employee concerns.
• Prepare to update Employment Contracts: Especially for staff on zero-hours or casual contracts
• Start to review key workplace practices:  Consider what procedures you have in place for managing performance, dismissing staff, shift changes and cancellations, and managing flexible work requests.  Importantly what documents to you use and how do you maintain them?
• Train Management Staff: Ensure your managers remain up to date on the changes as they emerge and provide training where necessary.

This Bill is badged as the biggest overhaul of workers’ rights in a generation, but employers will not need to worry if they stay informed and prepare now for the changes.

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