Navigating Upcoming Employment Rights Reforms

The UK is set to undergo a significant overhaul of workers' rights with the proposed Employment Rights Bill, which the government describes as the "biggest upgrade to rights at work for a generation." While the final details are still being shaped, and consultations are ongoing, it's crucial for employers to understand the potential impact of these reforms and begin preparing for changes expected in autumn 2026. Here's an overview of what employers need to know.

1. Unfair Dismissal: Rights from Day One

Under the proposed bill, employees will gain the right to claim unfair dismissal from the first day of employment, which is a major shift from the current two-year qualifying period. Employers should note that a nine-month probation period is included, during which dismissal procedures will be simpler. However, further consultations may result in adjustments to this proposal.

Implications for Employers:
Employers may need to revisit their onboarding and probationary policies to align with these changes. Clear documentation and transparent communication during the probation period will be essential to mitigate potential disputes.

2. Zero-Hours Contracts: Guaranteed Hours

Zero-hours contracts, which currently provide flexibility without guaranteed hours, will undergo changes. Employers will be required to offer workers a guaranteed-hours contract if they consistently work hours over a 12-week period. However, employees can choose to remain on a zero-hours basis if preferred.

Additionally, employers must provide "reasonable" notice for shift changes and offer compensation if shifts are cancelled or ended early.

Implications for Employers:
Adjustments to scheduling processes and systems may be necessary to ensure compliance. Employers should also prepare to manage and track hours worked to accurately transition eligible employees to guaranteed-hours contracts.

3. Flexible Working: The Default Approach

Flexible working will become the default option, with employers required to accommodate such requests from day one unless they can demonstrate an "unreasonable" burden. While the grounds for refusal remain similar—such as cost or impact on customer demand—the expectation is that flexibility will become the norm.

Implications for Employers:
Employers should consider updating flexible working policies and prepare to justify refusals based on reasonable grounds. Ensuring adequate staffing and resources to accommodate flexible working requests will be key to maintaining productivity.

4. Statutory Sick Pay (SSP): Immediate Access

The new bill proposes eliminating the waiting period and lower earnings threshold for SSP, meaning employees will be entitled from the first day they are ill, regardless of earnings.

Implications for Employers:
Employers may need to update their payroll systems to reflect these changes, ensuring that SSP is administered promptly. Reviewing existing sick pay schemes may also be beneficial to align company policies with the new statutory requirements.

5. Unpaid Parental and Bereavement Leave: Day One Rights

Currently, unpaid parental leave and bereavement leave require a year of service. The new bill extends these rights to employees from day one. Bereavement leave applies to employees with dependants, including spouses, children, and others with close ties.

Implications for Employers:
Employers should revise their leave policies to ensure compliance with these changes. Awareness campaigns or training sessions may be beneficial to inform both managers and employees of these updated rights.

6. Fire and Rehire: Limited Use

The bill seeks to restrict the practice of firing and rehiring on new terms. Employers will only be able to use this strategy in limited circumstances, such as when facing insolvency.

Implications for Employers:
Employers should review their workforce restructuring practices. Alternative cost-cutting measures should be explored, and legal advice may be necessary when considering changes to employment terms.

Preparing for the Reforms

While the specifics of the Employment Rights Bill are still under review, employers are encouraged to monitor developments closely. Early planning and consultation with HR professionals can ensure a smooth transition to these new employment standards.