A generational change

Matt Huggett examines the raft of employment law changes currently going through Parliament and the significant impact they will have on bosses

Once in a generation we see significant changes to employment law. Historically these changes see a strengthening of rights for workers and employees.

We have reached another one of those times. No doubt, many of you will have seen the headlines generated by the new Employment Rights Bill, which was announced on 17 July last year and put before Parliament on 10 October 2024. It is an incredibly wide-ranging bill which introduces a staggering 28 separate reforms to employment law.

This entire edition of the Journal could be taken up with an analysis of these reforms. Below I detail the most significant.

Day-one unfair dismissal right

The headline change is the reduction in the qualifying service required to bring an unfair dismissal claim from the current two-year period to just one day. This is a major shift in employment law which will introduce rights to claim unfair dismissal to an extra nine million workers in the UK.

“This is a major shift in employment law which will introduce rights to claim unfair dismissal to an extra nine million workers in the UK” 

The government has promised to give employers some flexibility in the first six to nine months of employment by allowing them to terminate during the probationary period (referred to as the “initial period of employment”).

We remain unclear as to exactly how this will be introduced at present but all aspects of the use of probationary periods and the modified dismissal procedure to be used by employers will be consulted on over the course of this year. The unfair dismissal right is expected to be implemented in autumn 2026.

Sexual harassment

We have already seen the introduction of the Worker Protection (Amendment of Equality Act 2010) Act 2023, which in October 2024 introduced a legal duty for employers to proactively take reasonable steps to prevent sexual harassment. In the Employment Rights Bill, this is built on further by increasing the responsibility on employers by requiring them not just to take “reasonable steps” but to take “all reasonable steps”. This will clearly make the standard required of employers a far higher bar than before.

There are also two further important changes relating to the obligations on employers to prevent sexual harassment:

• The requirement to take all reasonable steps to prevent sexual harassment of agency workers; and
• Making employers liable for the harassment of their employees and workers by a third party, such as a customer or supplier.

Zero-hours contracts

Employers will be required to ‘offer’ a guaranteed hours contract reflecting the hours qualifying workers regularly work over a reference period, expected to be 12 weeks. This would effectively make the long-term use of zero hours contracts impossible if the worker wishes to have guaranteed hours.

Further announcements by the government have included proposals to extend this right to agency workers (who were originally specifically excluded) and the implementation of anti-avoidance measures. This is likely to have a significant impact on lower-paid sectors where there is greater reliance on employer-led flexibility to the detriment of workers.

The other headline proposed changes are:

• An increase in employment tribunal time limits from three to six months;
• An extension in the protected period relating to redundancy for pregnant women or women returning from maternity leave. Currently protection is only for the period of pregnancy and maternity leave. This will be extended to provide a protected period for 18 months from the birth of the child;
• Removing the three-day waiting period for statutory sick pay, therefore providing a day-one right to sick pay;
• A change in collective consultation rules to take us back to those followed for a period of time after the Woolworths case, where the calculation of the threshold of 20 or more employees to be made redundant had to be calculated across all UK sites and not on a site-by-site basis. Clearly this will have a significant impact multi-site employers;
• Preventing fire and re-hire practices, making it far more important for employers to ensure they have effective flexibility clauses in their existing employment contracts, given that changing them in the future using fire and re-hire will be very restricted;
• A day-one right to unpaid parental leave (currently 26 weeks’ service is required);
• A day-one right to paternity leave (currently 26 weeks’ service is required); and
• An extension of bereavement leave to a “wider group of persons”, likely to be close family members. Current bereavement leave provisions are limited to parents of a child under 18.

These proposed changes, and those not listed, are still making their way through Parliament and there remains a lot of work to be done to firm up how they are to be implemented and by when.

If you work in employment law, you are going to have to keep your finger on the pulse even more than usual over the next 18 months.

Matt Huggett is a CILEX Lawyer, past CILEX president and employment partner at Stephens Scown.