Changes to the Employment Rights Act coming April

• Unfair Dismissal Rights from Day One: Perhaps the most notable change that Labour promised in their manifesto was the removal of the two-year buffer for employers that allowed them to dismiss employees within two years of the beginning of their employment without fear of an ordinary unfair dismissal claim. This is expected to come into force in mid-2026, at which point the two year ‘grace period’ will fall away, with protection from unfair dismissal beginning on day one. This may result in employers attempting to increase probation periods, however dismissals for redundancy during probation will still be fully challengeable.

• Changes to Fire and Rehire: The Government has reacted to a recent consultation and look to strengthen remedies against abuse of rules on collective redundancy and fire and rehire. This includes the cap on protective awards in collective redundancy situations, which will be increased from 90 days to 180 days to encourage employer compliance, and a promise to issue further guidance for employers on consultation processes for collective redundancies in due course.
• Changes to Statutory Sick Pay: The Government have highlighted their intent to strengthen statutory sick pay (SSP) under the Employment Rights Bill. Those earning below the Lower Earnings Limit (LEL) per week, which is £123 but is due to increase to £125 in April, are not currently eligible to receive SSP, however this requirement will be removed alongside the increase.
• Changes to Zero Hour Contracts: The Employment Rights Bill already includes complex proposals for low and zero-hours workers. This includes a right for low and zero-hour workers who satisfy certain conditions to be offered guaranteed hours, a right for zero-hour workers to be given reasonable notice of shifts and changes to shifts, and a right for zero hours workers to be provided with a payment each time a work shift is cancelled at short notice. There has also been a confirmation that there will be an exception to the requirement to offer guaranteed hours where there is a genuine temporary work need.

Despite this, there have been some significant changes to the Employment Rights Bill since it’s first tabling. These include changes to the guaranteed hours provisions which appear to suggest the possibility of contracting out of the requirement to offer guaranteed hours through collective agreement, and replace them with something else, so long as the new terms are contractual. Furthermore, it was noted that the words ‘any one establishment’ were removed from the provisions relating to collective redundancy situation. The previous wording would have meant that collective consultation would need to have been engaged whenever the total number of redundancies across a business was 20 or more, even if each site was making fewer than 20 redundancies. This has been altered, so that now it would be interpreted as being site specific, as opposed to across the entire company.

We will be providing periodic updates in regard to the developments and changes to the Employment Rights Bill, so stay tuned. Furthermore, please don’t hesitate to contact us to obtain a free employment documentation health check for your business to ensure it is up to date with the incoming legislation.