The publication of the Employment Rights Bill (the Bill) on 10th October marked a significant step towards the Government’s implementation of sweeping employment law reforms in GB. Below we take a look at some of the key changes in the Bill which employers in GB need to know.
1. Changes will be enforced from 2026
Many SMEs in GB have been worried about having to make sweeping changes to their contracts and processes in the next few months as a result of the Employment Rights Bill. Luckily, it seems we’ll all have a bit more time to prepare than initially expected. The Government has announced that most of the changes in the Employment Rights Bill won’t come into effect until at least 2026.
2. Nine-month statutory probation period
All workers will have a nine-month statutory probation period.
The Government will consult on a new statutory probation period for new employees. This will allow for a proper assessment of an employee’s suitability to a role, as well as reassuring employees that they have employment rights from day one.
To understand this, it’s helpful to recap some context. In its manifesto, Labour committed to introducing basic rights from day one, including ‘parental leave, sick pay and protection from unfair dismissal’. Currently, full rights don’t apply until the worker has been employed for two years in GB (one year in NI and ROI).
But many businesses have expressed concern about this policy since it would make it harder to legitimately dismiss employees who aren’t performing in their new roles.
The recent announcement is essentially a compromise. Most workers’ rights will be implemented from day one as planned. But the Government has announced a nine-month probation period where there will be a ‘lighter touch’ approach to dismissal. After nine months, full rights will be applied.
3. Day one rights for paid, paternity and bereavement leave
Day one rights will apply for paid paternity leave, bereavement and parental leave from day one.
These changes are largely as we expected. However, there are a number of clarifications worth mentioning:
4. Universal sick leave entitlement
Currently, employees are only entitled to statutory sick pay from the fourth consecutive day of illness. The Government has now clarified that it will introduce a universal entitlement to sick payments from the first day.
In the same announcement, they also announced they’d be removing the ‘lower earnings limit’ for statutory sick pay. This rule means that anybody paid less than £123 a week (on average) isn’t entitled to sick pay. This will grant sick pay rights to the lowest-paid workers.
5. Zero-hours contracts
The Government has pledged to abolish zero-hours contracts. Until recently, there were still questions around how far this ban would go. Now, we have more details to share:
6. Fire & rehire
The Government previously pledged to ban fire and rehire practices, but left some ambiguity around how far the ban would go. Now, they’ve confirmed that businesses will still be able to engage in fire and rehire practices, but only when it prevents the business from bankruptcy. In all other circumstances, it will be banned as expected.
7. Minimum wage
The Government has announced that they will change the remit of the Low Pay Commission so that it can account for cost of living changes. The Low Pay Commission is the board that advises the Government on changes to the minimum wage.
This will make it easier for the minimum wage to rise in line with inflation. The bill also states that age bands will be removed, meaning younger workers will be entitled to the same rate of pay as older ones.
We will provide updates as things progress but be reassured that the majority of reforms will take effect in GB no earlier than 2026.