After being introduced in the House of Commons in October 2024, the Employment Rights Bill is working its way through Parliament, with reform consultations planned throughout 2025.
This bill aims to boost economic growth by delivering the biggest increase in employment rights in the UK for a generation – giving British employees more dignity at work and better living standards, while also supporting UK businesses that engage in good employment practices.
Further policy details will be published after the Employment Rights Bill receives Royal Assent. The new regulations will be informed by consultations carried out on issues including Statutory Sick Pay, trade union legislation, and zero-hours agency workers by the end of the year.
While the government isn’t expected to implement these reforms until 2026, businesses should still pay attention to the consultations and make preparations before the bill becomes law.
Read on to discover some of the main changes the Employment Rights Bill will bring about.
Day one employment rights
On top of strengthening the day one flexible working rights that came into effect in 2024, the new bill proposes day one entitlement to unfair dismissal protection, paternity leave and unpaid parental leave, minimum earnings, and statutory sick pay without a waiting period.
Currently, an employee must be employed continuously for 2 years to be protected against unfair dismissal, but the bill will enforce this protection from the first day of employment.
Additionally, employees can only claim paternity leave after working for 26 weeks or unpaid parental leave after 1 year of employment, but will soon have these rights from the first day.
This may be concerning for employers who fear they won’t be able to dismiss underperforming employees easily, but the bill allows probation periods with less laborious fair dismissal rules.
Zero-hour contract rights
Zero-hour contracts have been contentious for many years, as zero-hours workers aren’t guaranteed a specific number of working hours and are simply expected to work as and when requested.
However, when the Employment Rights Bill comes into force, employers must offer contracts with guaranteed hours over a 12-week period. They must provide reasonable notice for shifts and also pay workers for any last-minute cancellations or adjustments to shifts.
While zero-hours contracts won’t be completely abolished, the 12-week contracted periods may cause problems for employers who extensively rely on seasonal workers.
How will the Employment Rights Bill affect your business?
When the bill is eventually enacted, employers will lose options for working arrangements, and adjusting to the new rules is likely to collectively cost UK businesses billions of pounds a year.
Complying with the new employment rights package is likely to have a big impact on hospitality businesses, as the accommodation and food sectors rely on zero-hours contracts the most.
There are no confirmed enforcement dates yet, with limited information available through online factsheets on the government website. However, employers should be reviewing their employment practices in advance to start preparing for the new regulations by the end of 2025.
If your business needs assistance with admin and payroll to keep up with legislation changes, including minimum wage and tipping regulations, our accountants in Barnsley can help.
Get in touch with the team at gbac today by calling 01226 298 298 or emailing info@gbac.co.uk to discuss our financial services and what we can do to improve the efficiency of your business.