Employment Law Changes Are Coming!

Labour is introducing its flagship “Plan to Make Work Pay” in the form of the new Employment Rights Bill into Parliament today. The Government is proposing a raft of nearly 30 employment law changes, including enhancing family leave protections and controversially, introducing unfair dismissal protection from day one of employment.

When and how many of these reforms will take effect and how they will actually work in practice is not clear. 2025/2026 is currently being touted but it’s not been confirmed. In the meantime, here is a summary of some of the key proposals which are likely to affect professional services firms: 

1. Unfair dismissal - Removing the current two-year qualifying period for protection from unfair dismissal to make it a day one right.  The government has said this will coincide with a statutory probation period of nine months for new hires, but employees will still be able to claim for unfair dismissal. The government says there will be a “lighter touch” approach to letting an employee go during the probation period if the role is not working out but they have not clarified what that means.   
2. Family leave - Introducing enhanced family leave rights including rights to paternity, unpaid parental and bereavement leave from day one of employment (rather than the current 26 weeks qualifying period). The Government has also promised a full review of all parental-leave rights promised alongside the Bill.
3. Enhanced rights for women in work - Introducing new statutory protection from dismissal for women while pregnant, on maternity leave and within six months of returning to work. There is also going to be a requirement to draw up an action plan to address gender pay gaps and support female employees through menopause.
4. Sick pay – Making statutory sick pay a day one right.
5. Flexible working - Making flexible working the default where this is ‘practical’. What this means is still currently unclear. Interestingly, there will only be guidance (but not legislation!) on Labour’s big manifesto pledge of “the right to switch off” which prevents employees from being contacted out of hours (except in exceptional circumstances). 
6. Minimum wage – Introducing a requirement to account for the cost of living when setting minimum wage rates. This also includes removing the current age bands which sets lower pay for younger staff.

Other reforms include: a ban on zero-hours contracts, a ban on fire and rehire practices and the introduction of an enforcement body called the “Fair Work Agency” which will be tasked with enforcing employment rights such as holiday pay.  

Bear in mind none of this has been enacted into law. If and when the Bill does receive royal assent, the normal principles of employment law and common sense will continue to apply. Every employee and every situation is different and these new reforms will need to be considered in light of that.